Why Google and Meta Spent $1B+ on Israeli Startup

Google, Meta, Unity, and Moloco spend their days trying to take advertising dollars away from each other. This week they did something that makes no competitive sense: they collectively wired more than $1 billion into a single Israeli company, at a $2.7 billion valuation, on terms that guarantee none of them will ever control it.

The company is AppsFlyer, founded in Herzliya in 2011. It is not a household name, because its job is invisible: it tells advertisers which ad actually caused a sale. That sounds dull until you realize it is the question the entire digital ad business is built on, and that artificial intelligence is quietly making it impossible to answer.

Here is the mechanism, because it matters. For thirty years, online advertising rested on one humble event: the click. You saw an ad, you clicked, you bought, and a cookie stitched those three moments into a clean line a marketer could read. AI is severing that line at both ends.

At the top, people have stopped clicking. In the first four months of 2026, fewer than one in three Google searches sent the user to any website at all (68 percent ended with no click, up from 49 percent in 2019). The answer now arrives inside the chatbot or the AI overview, and the visit that used to be measurable never happens.

At the bottom, the buyer is increasingly not a human. AI agents now research and check out on your behalf: OpenAI and Stripe shipped an in-chat checkout last fall, and Visa and Mastercard have built payment rails specifically so software can buy things for you. When an agent completes a purchase through an interface meant for machines, no browser opens, no cookie fires, no confirmation page loads. The click that advertising bills against simply does not exist.

The industry knows. In the IAB’s State of Data 2026 survey, 75 percent of buy-side leaders said their core measurement methods are underperforming. As Upwave chief executive Chris Kelly put it, the game is shifting from mental availability to machine availability: AI assistants do not scroll, they recall.

And the same technology that is dismantling the old ad system is busy building a new one inside the answer box. OpenAI began testing ads in ChatGPT back in February and opened a self-serve ad platform in May, yet it kept hedging about how far it would go. Sam Altman had once called advertising inside AI uniquely unsettling and a last resort. That hesitation is now over. This week at Cannes Lions, OpenAI’s chief revenue officer, Denise Dresser, told the assembled ad world that the company is “clearly in the advertising business now.” The scale behind that sentence is hard to overstate: ChatGPT has more than 900 million weekly users, and by OpenAI’s own estimate roughly one in five of their questions carries direct commercial intent, a flight to book, a product to choose, a dinner to plan. The company says the ads sit at the bottom of answers, clearly labeled, and do not change what the model tells you. Either way, the most trusted answer box on the internet is now also a storefront, and OpenAI is reportedly heading for a public offering this year.

Put those two forces together and you get the strange logic behind this week’s deal. If the platforms that sell the ads also get to grade their own homework, and in an AI world they increasingly do, advertisers have no neutral way to know what is real. The scarcest asset in the new system is not reach, and it is not data. It is a scorekeeper nobody owns.

That is precisely what AppsFlyer almost stopped being. According to Calcalist, the company spent the start of this year close to a private-equity buyout, reportedly by Apollo and Israel’s Fortissimo at around $2 billion. A sale to an owner with its own agenda would have compromised the one thing that makes AppsFlyer useful: that it answers to no single advertiser or platform. The industry analyst Eric Seufert called it too big to let fail, comparing the rescue to the banking panic of 1907, when rivals pooled money to save a piece of shared infrastructure none of them could afford to lose.

So instead of selling, four competitors bought in together, and wrote the neutrality into the contract. The press release is unusually blunt: the investors take minority, non-controlling stakes and will not receive preferential treatment in relation to AppsFlyer’s interfaces, measurement signals, attribution logic, or commercial terms. They paid a premium specifically to keep a referee independent rather than let any one of them capture it.

As AI takes over more of the decisions, independent attribution and measurement stops being an advantage and becomes the foundation everything else is built on.

That is how chief executive Oren Kaniel described the bet. And it is worth sitting with where that foundation is being poured. The neutral measurement layer that Google, Meta, Unity, and Moloco just agreed they cannot live without is Israeli. AppsFlyer is the anchor, but it is not alone: Singular does cross-channel analytics, Taboola and the merged Outbrain-Teads move the open web’s native ads, and Yotpo runs marketing for tens of thousands of online stores. Herzliya quietly became the place where the industry keeps score.

The click built the legible internet. It let a corner shop know its ad worked and a giant know which dollar to spend next. AI is dissolving it, and replacing it with something faster, stranger, and far harder to audit. In that world the most valuable seat in advertising is the one no one is allowed to sit in. Right now, four of the biggest companies on earth are paying to keep it empty, and to keep it in Israel.