Digital bank One Zero launched with the promise of offering AI-powered personalized banking services, but has so far failed to live up to expectations. The bank announced earlier this year that it had lost NIS 620 million (about USD 166 million) by the end of 2023, consuming nearly two-thirds of the funds it raised. Despite heavy investments in technology development, advertising, and aggressive marketing, the bank only managed to attract 100,000 customers, of which 70,000 are active. These numbers fall far short of expectations and have not had a significant impact on Israel’s traditional, competition-free banking market. Unlike Mobileye and OrCam, some of the challenges here still stem from growing pains and the significant investments required to compete with established banks that offer a wide range of services beyond attractive deposit rates and a limited securities portfolio.

Shashua has two other startups that continue to capitalize on the aura of promise that characterized all of his ventures in their early stages. The first and most famous is AI21, which became a unicorn after raising funds at a $1.4 billion valuation in late 2023. The second, much smaller company, is Mentee Robotics, which is working on developing a humanoid robot that responds to voice commands and performs various tasks, such as housework. AI21 has the potential to be a huge success, as it competes at the forefront of technology with well-known names such as OpenAI, Anthropic and Mistral, with its own language model developed for generative AI applications. However, the pace of its growth and value creation lags behind the “arms race” in the US

What explains this series of disappointments? As always, there is no single explanation, but a combination of factors that create the gap between vision and reality. Shashua himself cannot divide his time between five companies, and he actively runs only Mobileye, to which he devotes most of his attention. The other companies are run by hired CEOs, as in the case of One Zero and OrCam, or by co-founders who joined forces with Shashua in the startup phase, as with AI21 and Mentee. While Shashua’s ideas are always exciting, sometimes they fail in execution, whether due to not finding the right business model or due to excessive enthusiasm for the technology. Shashua has the ability to inspire with this enthusiasm, even when the technology has not yet proven its commercial viability.

Some also propose an alternative and rather surprising explanation: Shashua’s very presence and involvement could lead to a certain complacency in the companies in which he is involved. The financial support he can offer as one of Israel’s richest and most liquid people, combined with his global reputation that attracts high-profile investors, could paradoxically be a disadvantage. The assumption, even if not always justified, that additional capital will always be available could lead to more experimentation and less pressure to perform and achieve goals.

Importantly, all of Shashua’s companies are deep-tech companies, meaning they are based on advanced technology that requires greater than usual resource investments. In addition, his companies, with the exception of Mobileye, target end users rather than the business market. These two features are unusual in Israel’s high-tech industry, which typically focuses on software for businesses, often in the startup phase. Developing deep technologies and targeting the consumer market make achieving commercial success particularly complex and slow.

Another common denominator of Shashua’s companies is a certain arrogance that seems to be embedded in their DNA – perhaps not a flaw, but a trait. The companies he co-founds are always positioned as the most innovative, revolutionary and promising, thanks to their technology and Shashua’s reputation. Those who know Shashua might say that this attitude reflects his own personality. Although Shashua’s arrogance is often backed up by tangible successes, his companies are still startups that sometimes mistakenly believe they have already conquered the world.

Three of Shashua’s five companies are currently going through a difficult period in their business development, but they are not yet irretrievable. Mobileye needs to learn to better manage investor expectations. Blaming the volatility of the Chinese market every time is not sustainable, as no company operates without uncertainty or competition. Digital bank One Zero needs to clarify its strategic direction. Currently, it seems to be geared towards more sophisticated and wealthy customers, but it still struggles to provide all the services they need. Banking cannot rely on interest on deposits alone, as traditional banks’ most strategic customers are often exempt from most fees and receive higher interest, making One Zero’s offerings less attractive. OrCam is the biggest question mark at this stage, as it is essentially starting from scratch, but this also significantly reduces the pressure on the company.

The really big question for all of Shashua’s companies is whether his lab will continue to thrive and succeed commercially now that all the big tech companies – from Google to Nvidia – are entering his field. The futuristic vision that could once be developed in relative silence has now become the main arena of global competition, with all eyes on it and everyone wanting a piece of it. That question remains open.