Two CEOs, a real-time pivot and an AI assault: Artlist's quiet revolution
For the first time in the history of the Scale Up Nation podcast, two CEOs of the same company—Ira Belsky and Itzik Elbaz of Artlist—sat in the studio. They discussed the transformation of their "accidental startup" and how the company is adapting to the AI era.
For the first time in the history of the Scale Up Nation podcast by Erez Shachar and Ram Ben-Yishai, two CEOs of the same company sat in the studio: Ira Belsky and Itzik Elbaz. And that is not the only thing unique about Artlist. Erez Shachar defined Artlist as "the accidental startup" — "nothing in Artlist echoes what is familiar from other places," he says. And rightly so: the company was founded in 2016 in Kibbutz Afikim by four artists who did not even know what ARR was and did not think they were building a startup.
When Sora, the video generation system from OpenAI, was introduced, "the biggest YouTubers said: this is the end of Artlist." The Israeli company had spent a decade building a business that allows creators to license music, video clips, effects, and templates. Now, a technology has appeared that can generate all of these instantly and with customization. However, instead of fortifying themselves in the existing business, Elbaz and Belsky decided that the tool threatening them should become their next growth engine. Today, almost half of the company's $300 million ARR comes from AI products that did not exist two years ago. "Everything we did in almost ten years," Elbaz summarizes the scale of the change, "ended in two years." In the month preceding the recording of the episode, the company cut almost 50% of its workforce as part of deep product and organizational changes. Now it no longer wants to be identified only with a stock library for creators, but to become the central address for any creative product — from a human or a machine.
They told investors: if you want a presentation — make it yourself
Belsky started as a video creator without an academic education. He directed, filmed, and edited, and experienced firsthand the difficulty of finding high-quality music for which one could purchase a simple and clear license. The idea was born from a personal need: to build a music catalog on a subscription model for independent video creators. On a routine trip to Katzrin, he told his friend, musician Assi Aylon, about the plan. "I didn't understand anything, but I trust you," was, according to him, the response. Eyal Raz, a musician and childhood friend, joined them, and to build the site they recruited Elbaz, a friend of Belsky's from his service in the Egoz unit. Elbaz had been developing websites since age 16 and worked for a time at Mellanox; music and video were a professional hobby for him. When the annual subscriptions renewed at the end of the first year, revenues almost doubled in one day. Only then did venture capital funds around the world begin to notice the traffic on the site and send messages. The founders, who were already running a profitable business, did not understand why they should spend time on a presentation for an investor from whom they did not want money. "We were a business. We didn't even call ourselves a startup," says Belsky. "Four partners, good money, having fun." When representatives from funds asked him to prepare a presentation for a senior partner, he replied: if you want a presentation — make it yourself.
The meeting with the American fund Elephant illustrated the gap between the worlds. The investor arrived from New York to an isolated industrial park in the north and ordered the driver of the black van not to leave. According to Belsky, the CEO of Shazam also came to another meeting as a content expert. Both guests in suits met the cleaner near the cowshed, who was surprised by the visit. Despite the unconventional setting, the fund understood the creator economy and the market potential very well. At that time, Artlist was already in the $6–8 million ARR range — a figure the founders did not know how to name. When the fund offered a valuation of $60 million, they asked for $100 million without a structured calculation. The investors left the room and returned with $80 million, and the deal was signed. The money was not intended primarily to finance the company, which was already profitable, but included a secondary component for the founders. This was the first reason why they agreed to listen at all.
70% of the traffic for OpenAI's video generation model came from Artlist
Artlist's first reaction to the generative revolution was not panic but curiosity. "We don't approach things that happen from an angle of fear, we are mainly excited by things," says Ira Belsky, co-CEO. The first category was Voice Over — there the company took the technology model of Eleven Labs, recorded actors in its studios, and created a voice catalog "better than Eleven Labs" — until the latter got scared of the competition and closed its API to them on short notice. "We already bought burner phones," Belsky laughs about the days of the crisis. "We went through three models until we found something normal."
The business turning point came with the launch of Sora 2. Artlist was one of the first to implement the API and absolutely the first to market it. "In retrospect, Google told us: know that in the first days you were 70% of the traffic of Sora 2 in the United States. Second to you, with 13%, were OpenAI," reveals Belsky. The result: a 600% jump in new users, and an addition of $20 million ARR per month. "We thought we would be at this ARR at best at the end of 2027 — and we reached it in the third quarter of 2025."
But the success itself exposed the problem. Belsky tells of a competitor named Higgsfield that was born into the AI world: "They are 70 employees and do five times more than us. And you say — we are 500 people, why aren't we working ten times faster than them?" The answer was painful: "By the time I get something moving and synchronize twenty people for a project, they with one builder and one more person built it and launched."
The organizational structure built from scratch — and exited with 50% fewer people
The climax came a month ago, when the company parted ways with about 200 of its 500 employees. But unlike the waves of layoffs flooding the industry, at Artlist they insist that the number was not a goal: "The forty percent was not forty percent at any stage," says Belsky. "We didn't need to save money. The board didn't ask to cut. What we wanted was to be an AI organization." The process: every manager was asked to plan an AI-native organizational structure from a blank slate — "ignore everything you know, and don't try to push just to push" — justify every function, and synchronize inter-departmental processes. Only at the end were the existing employees assigned to the new tree. "We have amazing employees and they will definitely succeed in making this change," emphasizes Belsky. "We just realized that to make them succeed, you need to change the structure."
Elbaz adds the bottom line of the new era: "Everything in the company that happens in a month — that is still considered fast. We are in a period of war, without the discounts of the crazy reality we live in in Israel. Outside they are drinking martinis, and we here need to ride over all this competition. That means I need to change completely."
From a catalog to an orchestration layer for video creators
The big insight came from the world of code: "We saw that tools like Cursor exist for a reason," says Belsky. "You are a video creator — what, will you subscribe every day to something new that came out? We understood that consolidation is needed." Artlist became a layer that sits between dozens of generative models and the creator: one credit wallet, curation of models, and above all — a license. "We went over all the licenses and they are signed verified by Artlist. You can have peace of mind," says Elbaz. "You are returning to being creators."
Future shrouded in fog
Where do we go from here? Artlist is launching "Studio" — software that simulates an entire shooting day in a virtual environment: casting actors, choosing locations, camera and lens, shot hierarchy. "We wanted to do for video the Ableton revolution that happened in music twenty years ago — to give people the ability to produce an Oscar from their room," says Elbaz. The company is in talks with studios in Hollywood and is even financing a full-length film produced in AI. And in parallel, the organizational engine has moved to weekly planning: "We told the board — we reset decisions every month," says Belsky. "They said: we trust you, run. There is no other way to operate."
"Every month there is a restart for the industry," says Elbaz. "While they told us well done for managing to change, we changed four more times." Belsky adds that the company presents a budget to the board, but resets decisions every month and actually works in weekly cycles. Regarding an IPO, they answer: "We don't know how to say what next month will look like," says Belsky. Elbaz explains that a company of Artlist's size and revenue naturally moves toward the public market, but the task right now is to build a strong company in a period when the product, competition, and customers change almost weekly.
