Israel’s tech sector is being pushed deeper into artificial intelligence integration, with capital, multinational R&D centers, and regional partnerships all tightening around a compact ecosystem that already delivers more than 60% of exports and 20% of GDP. Aviva Steinberger, the interim CEO of Startup Nation Central, said the shift is moving from experimentation to embedding AI into core systems, while private investment in Israeli tech reached $16.7 billion in 2025, an increase of more than 30% year over year.
Who Has the Power
Steinberger wrote that around the world, 83% of organizations rank AI as a top-five priority, and leadership teams are embedding it into human resources, legal, information technology, sales and customer support to streamline workflows and reduce operating costs. Nearly half cite talent shortages as a barrier to scaling, she said, and many remain focused on turning experimentation into measurable value. In Israel, she wrote, the conversation moves quickly from efficiency to expansion, product differentiation and market creation, with the question less about where AI can save time and more about where it can unlock growth.
She said innovation contributes to 20% of GDP and more than 60% of exports in Israel, and that R&D intensity averages 6% of GDP, the highest in the world. Nearly 7,000 tech companies operate in a dense and highly networked environment, she wrote, with multinational R&D centers, venture capital, academia and founders sitting within a compact geography that accelerates feedback loops between idea and execution. That same concentration is where the money flows: capital is moving toward companies embedding AI directly into core products, infrastructure layers and revenue models.
Steinberger said nearly 20% of Israeli firms are classified as “runners,” actively scaling AI across core functions, compared with 14% globally. She wrote that 84% report production-level AI use in R&D and engineering, well above the global average of 60%, and close to 40% custom build their AI systems, compared with 33% globally. In her framing, AI is treated as core architecture, designed for control, flexibility and long-term defensibility.
Who Gets Pulled Into the Machine
As AI matures, Steinberger wrote, the center of gravity shifts toward integration and infrastructure, and training and deploying models at scale requires advanced semiconductors, optimized networking, secure computation and energy efficiency. She said Israel plays a significant role in semiconductor design and AI acceleration, anchoring itself deep in the stack, while cybersecurity remains tightly interwoven with AI development as explainability, resilience and governance shape system design from the outset.
Since 2023, alongside the rise of generative AI, Israel’s cybersecurity sector has more than doubled its funding volume, Steinberger wrote, while AI-driven cyber funding rose from 34% of total sector investment in 2024 to 64% in 2025. She said the sector is growing faster than the United States, while Europe and Asia experience declines. The numbers point to a system where security, surveillance, and AI development are increasingly fused into the same investment pipeline.
She also wrote that technology has become a shared language across the Middle East and that economic cooperation following the Abraham Accords is expanding collaboration in digital health, climate tech, fintech and cybersecurity. Israeli AI companies are engaging with partners in the United Arab Emirates and across the region through pilot projects, joint ventures and investment channels that connect innovation with new markets. India and Israel are also expanding cooperation across AI, semiconductors and deep tech through joint R&D initiatives and bilateral innovation frameworks, and the India-Israel Industrial R&D and Technological Innovation Fund supports cross-border projects combining Israel’s applied R&D intensity with India’s scale, engineering depth and market reach.
Steinberger said more than a quarter of Israeli executives report strong confidence that AI initiatives will generate measurable revenue gains, compared with 20% in the rest of the world. Israel, she wrote, enters this phase with infrastructure readiness, technical depth, investor confidence and international partnerships in place.
What They Call Responsible Innovation
Hagit Freud, managing director of the Israeli nonprofit Nura Global Innovation Lab, wrote that her first encounter with sub-Saharan Africa was as a backpacker some 15 years ago. She said she felt deep gratitude and deep frustration, gratitude for being born in Israel, where modern infrastructure, a functioning public health system and education were provided, and frustration as she traveled from Ethiopia to South Africa by public transportation and saw that intelligence and drive are evenly distributed around the world, but opportunity is not.
Freud wrote that growing up in Israel within a socialist Zionist youth movement and living in a communal setting until her mid-20s shaped her understanding of social justice, collective responsibility and the drive to reduce inequality. Those principles guide her work at the Nura Global Innovation Lab, which bridges Israeli innovation with global development challenges. She wrote that she and her colleagues consider how best to extend technology to communities facing food insecurity, water scarcity and fragile health systems, challenges she said are remarkably similar to those Israel overcame in its early decades.
Freud wrote that Israeli technologies offer solutions that can genuinely improve lives, citing drip irrigation systems that conserve water in arid regions and mobile health platforms that reach patients in remote areas. She said the “can-do” approach leads to scientific breakthroughs that boost agricultural productivity, improve health outcomes and strengthen resilience in times of crisis.
But she also wrote that much of the tech industry has historically focused on high-income countries and that when innovations do reach low-income markets, they often fail to account for local circumstances, long-term sustainability or the actual needs of the communities they are meant to serve. Market limitations, gaps in government infrastructure and a dearth of dedicated funding exacerbate these challenges, she said. Technology transfer only creates meaningful, lasting change when it is implemented thoughtfully and ethically, through local partnerships and a long-term commitment to impact.
Freud wrote that companies succeeding in these markets, both financially and socially, work closely with local partners including entrepreneurs, NGOs, private sector leaders, research institutes and governments. Solutions are co-designed and adapted using local insights rather than simply exported, she said, and listening and sustained engagement are essential to ensuring innovation provides lasting progress rather than a temporary fix. She wrote that across Israel, a growing network of organizations is actively engaging with these questions, and that initiatives like OLAM’s Aspire program support Israeli and Jewish organizations in strengthening ethical, impact-driven practices rooted in Jewish values to ensure innovation is paired with thoughtful, sustainable outcomes.
Who Gets Left to Climb the Ladder
Batsheva Shulman wrote that across Israel’s tech landscape, women are not just participating; they are leading, innovating and shaping the future of STEM fields. She said systemic and cultural barriers remain, particularly for olim (new immigrants) without professional networks or fluent Hebrew, but that opportunities for women to enter hi-tech and STEM are steadily expanding.
Julia Selow, entrepreneur and founder of Habaita, an AI-driven relocation platform, said breaking into Israel’s tech workforce can be difficult as a new immigrant. Selow, originally from Luxembourg, said she experienced frustration navigating bureaucracy and rebuilding her professional footing from scratch after making aliyah for the second time. “Because my first round of making aliyah was very painful, I decided I did not want it to go the same way. So I started to develop an app, at the beginning, for myself,” she said. What began as a personal tool to search for apartments and jobs evolved into a full AI platform designed to streamline relocation in Israel, one she hopes will eventually expand globally.
Selow said, “It’s like an AI operating system for global relocation... starting with Israel and covering the entire road map of relocation in general,” and said the platform includes a “buddy system” connecting olim with Israeli mentors who offer guidance and cultural support. She said she learned programming from her father and added, “I think maybe that’s exactly a solution: that parents need to push their kids, to bring them closer to technology from a young age.” Selow also said, “I do believe that olim have a lot of knowledge... I think they could be a huge asset to the company.”
Meygan Aflalo, founder of Olim Matslihim, which helps new immigrants find jobs and integrate into the labor market, particularly in hi-tech, said women often bring powerful qualities to client-facing roles. She said, “When it comes to hi-tech, and when it comes to client relationships, building trust and relationships, and helping people see value... there’s something that is very powerful in the way that a woman can do it.” Aflalo said more women are stepping into leadership positions as team leaders, VPs and directors, and that these roles are increasingly accepted and encouraged. She said that at her previous company, SimilarWeb, she noticed strong female representation, and that Olim Matslihim had 57% female participation and 43% male participation.
Jenyfer Jerbi, co-founder of Women in Tech Israel, said the organization focuses on building networks that support women at every career stage, from students to senior executives. She said, “We are for everybody – the Sabras [native Israels], the international, and obviously the olot [female new immigrants]... Our mission is to help women and girls in Israel to stay in tech, to jump in tech, to study STEM, and to build their careers.” Jerbi said olim are more involved with the organization because being part of a community helps them integrate. Women in Tech Israel operates through four pillars — advocacy, business, education and social impact — and its annual summit and 24-hour world tour expand networks beyond geographic limitations.
Jerbi said the organization also works regionally in Israel, with outreach to minorities and underserved communities. She said Israel is privileged by the nature of its Start-Up Nation ecosystem and that there is a positive precondition for girls to enter tech, though not all girls necessarily want to go there. She also acknowledged ongoing work-life balance challenges, saying, “There’s this kind of intensity here that we love and hate... How can I grow in my career, keep growing in my career, when I also want to have a family?” She said flexible workplaces make a critical difference, adding, “You feel comfortable to do your work and to be empowered to do what you do best. But also feeling good that you can go home and be with your kids when you need to.”