Battered by Gaza war, Israel’s tech sector in recovery mode

NVIDIA components are displayed at the GTC Paris NVIDIA stand at the VivaTech technology startups and innovation fair at the Paris Expo Porte de Versailles, in Paris on June 12, 2025. (AFP)
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Updated 21 February 2026
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Battered by Gaza war, Israel’s tech sector in recovery mode

  • “High-tech companies had to overcome massive staffing cuts, because 15 to 20 percent of employees, and sometimes more, were called up” to the front as reservists, IIA director Dror Bin told

JERUSALEM: Israel’s vital tech sector, dragged down by the war in Gaza, is showing early signs of recovery, buoyed by a surge in defense innovation and fresh investment momentum.
Cutting-edge technologies represent 17 percent of the country’s GDP, 11.5 percent of jobs and 57 percent of exports, according to the latest available data from the Israel Innovation Authority (IIA), published in September 2025.
But like the rest of the economy, the sector was not spared the knock-on effects of the war, which began in October 2023 and led to staffing shortages and skittishness from would-be backers.
Now, with a ceasefire largely holding in Gaza since October, Israel’s appeal is gradually returning, as illustrated in mid-December, when US chip giant Nvidia announced it would create a massive research and development center in the north that could host up to 10,000 employees.
“Investors are coming to Israel nonstop,” Prime Minister Benjamin Netanyahu said at the time.
After the war, the recovery can’t come soon enough.
“High-tech companies had to overcome massive staffing cuts, because 15 to 20 percent of employees, and sometimes more, were called up” to the front as reservists, IIA director Dror Bin told AFP.
To make matters worse, in late 2023 and 2024, “air traffic, a crucial element of this globalized sector, was suspended, and foreign investors froze everything while waiting to see what would happen,” he added.
The war also sparked a brain drain in Israel.
Between October 2023 and July 2024, about 8,300 employees in advanced technologies left the country for a year or more, according to an IIA report published in April 2025.
The figure represents around 2.1 percent of the sector’s workforce.
The report did not specify how many employees left Israel to work for foreign companies versus Israeli firms based abroad, or how many have since returned to Israel.

- Rise in defense startups -

In 2023, the tech sector far outpaced GDP growth, increasing by 13.7 percent compared to 1.8 percent for GDP.
But the sector’s output stagnated in 2024 and 2025, according to IIA figures.
Industry professionals now believe the industry is turning a corner.
Israeli high-tech companies raised $15.6 billion in private funding in 2025, up from $12.2 billion in 2024, according to preliminary figures published in December by Startup Nation Central (SNC), a non-profit organization that promotes Israeli innovation.
Deep tech — innovation based on major scientific or engineering advances such as artificial intelligence, biotech and quantum computing — returned in 2025 to its pre-2021 levels, according to the IIA.
The year 2021 is considered a historic peak for Israeli tech.
The past two years have also seen a surge in Israeli defense technologies, with the military engaged on several fronts from Lebanon and Syria to Iran, Yemen, Gaza and the occupied West Bank.
Between July 2024 and April 2025, the number of startups in the defense sector nearly doubled, from 160 to 312, according to SNC.
Of the more than 300 emerging companies collaborating with the research and development department of Israel’s defense ministry, “over 130 joined our operations during the war,” Director General Amir Baram said in December.
Until then, the ministry had primarily sourced from Israel’s large defense firms, said Menahem Landau, head of Caveret Ventures, a defense tech investment company.
But he said the war pushed the ministry “to accept products that were not necessarily fully finished and tested, coming from startups.”
“Defense-related technologies have replaced cybersecurity as the most in-demand high-tech sector,” the reserve lieutenant colonel explained.
“Not only in Israel but worldwide, due to the war between Russia and Ukraine and tensions with China.”
 

 


US presses missile issue as new Iran talks to open in Geneva

Updated 37 min 13 sec ago
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US presses missile issue as new Iran talks to open in Geneva

  • New round of negotiations in Geneva comes after the US carried out a massive military build-up in the region
  • Iran’s president reiterates Tehran is not seeking nuclear weapons in line with policy

GENEVA: The United States and Iran are set to hold indirect talks in Switzerland on Thursday aiming to strike a deal to avert fresh conflict and bring an end to weeks of threats.
The new round of negotiations in Geneva comes after the US carried out a massive military build-up in the region and President Donald Trump repeatedly threatened to strike Iran if a deal is not reached.
In his State of the Union address on Tuesday, Trump accused Iran of “pursuing sinister nuclear ambitions.”
He also claimed Tehran had “already developed missiles that can threaten Europe and our bases overseas, and they’re working to build missiles that will soon reach the United States of America.”
The Iranian foreign ministry called these claims “big lies.”

Iran president says ahead of US talks not seeking nuclear weapon ‘at all’

TEHRAN: Iran’s President Masoud Pezeshkian reiterated on Thursday that Tehran was not seeking nuclear weapons in line with the policy set by the country’s supreme leader.

“Our Supreme Leader has already stated that we will not have nuclear weapons at all,” Pezeshkian said in a speech.

“Even if I wanted to move in that direction, I could not — from a doctrinal standpoint, I would not be permitted.” — AFP


The maximum range of Iran’s missiles is 2,000 kilometers according to what Tehran has publicly disclosed. However the US Congressional Research Service estimates they top out at about 3,000 kilometers — less than a third of the distance to the continental United States.
The dispute between the countries mostly revolves around Iran’s nuclear program, which the West believes is aimed at building an atomic bomb but Tehran insists is peaceful.
However the US has also been pushing to discuss Iran’s ballistic missile program, as well as Tehran’s support for armed groups hostile toward Israel.
Secretary of State Marco Rubio warned that Iran must also negotiate on its missile program, calling Tehran’s refusal to discuss ballistic weapons “a big, big problem” on the eve of the talks.
He followed up by saying “the president wants diplomatic solutions.”
Iran has taken anything beyond the nuclear issue off the negotiating table and has demanded that the US sanctions crippling its economy be part of any agreement.
‘Neither war nor peace’
Iranian President Masoud Pezeshkian said on Wednesday he had a “favorable outlook for the negotiations” that could finally “move beyond this ‘neither war nor peace’ situation.”
Foreign Minister Abbas Araghchi, who is leading the Iranian delegation at the talks, has called them “a historic opportunity,” adding that a deal was “within reach.”
In a foreign ministry statement that followed a meeting with his Oman counterpart, Araghchi said the success of the US negotiations depend “on the seriousness of the other side and its avoidance of contradictory behavior and positions.”

 


The US will be represented by envoy Steve Witkoff and Jared Kushner, who is married to Trump’s daughter Ivanka.
The two countries held talks earlier this month in Oman, which is mediating the negotiations, then gathered for a second round in Geneva last week.
A previous attempt at negotiations collapsed when Israel launched surprise strikes on Iran last June, beginning a 12-day war that Washington briefly joined to bomb Iranian nuclear sites.
In January, fresh tensions between the US and Iran emerged after Tehran engaged in a bloody crackdown on widespread protests that have posed one of the greatest challenges to the Islamic republic since its inception.
Trump has threatened several times to intervene to “help” the Iranian people.
Emile Hokayem, senior fellow for Middle East security at the International Institute for Strategic Studies, said that “the region seems to expect a war at this point.”
In January, there was “a big push by a number of Middle Eastern states to convince the US not to” strike Iran.
“But there’s a lot of apprehension at this point, because the expectation is that this time” a war would be “bigger” than the one in June.
Tehran residents who spoke to AFP were divided as to whether there would be renewed conflict.
Homemaker Tayebeh noted that Trump had “said that war would be very bad for Iran.”
“There would be famine and people would suffer a lot. People are suffering now, but at least with war, our fate might be clear,” the 60-year-old said.