The ongoing conflict could have long-term implications for Israel's tech sector, which accounts for 14% of jobs and nearly a fifth of the country's GDP. There may be increased investment in AI and tech due to their close ties with military spending. Despite the current situation, Prime Minister Benjamin Netanyahu announced in June that Intel plans to invest $25 billion in a new factory in Kiryat Gat, which is expected to open in 2027 and could employ thousands of people.
Key takeaways:
- Tech companies operating in Israel are expected to increase security due to potential disruptions caused by the Israeli military's shift to a war footing, which may include a full-scale invasion of the Gaza Strip.
- Israel's high-tech industries, which account for 14% of jobs and almost a fifth of gross domestic product, could face significant disruptions, including staff being called up as military reservists.
- U.S. tech shares, including those with large operations in Israel, were largely down. Intel, Israel's largest private employer and exporter, is closely monitoring the situation and taking steps to safeguard and support its workers.
- Despite the current conflict, the tech and AI sector in Israel could see increased investment in the long term due to the industries' close tie-in with military spending.