Israel's tech industry under threat as investors anticipate disruptions amid war
Investors urge enhanced security for Israeli tech companies following Hamas attacks and abductions, killing hundreds of Israelis and anticipating potential disruptions.
emerging tech
Highlights
- If the conflict grows, tech company staff may have to leave their jobs to serve as military reservists, which could affect their work
- Nvidia cancelled an AI summit in Tel Aviv next week, and CEO Jensen Huang's scheduled speech was also called off
- The spokesperson of chipmaker Intel Corp has denied comment on chip production has been affected or not
Tech companies in Israel are expected to increase security due to concerns about potential disruptions caused by recent terrorist attacks by Hamas.
Israel's tech sector is a vital part of its economy, providing jobs for 14 percent of the workforce and contributing nearly a fifth of the gross domestic product (GDP).
If the conflict increases, some tech workers might be called up for military service, diverting resources. Investors expect measures to safeguard physical facilities, as tech spending has ties to the military.
According to Reuters report, Nvidia, known for making AI and graphics chips, cancelled an AI summit in Tel Aviv, where CEO Jensen Huang was to speak. Intel, Israel's top private employer and exporter, didn't reveal if chip production was impacted. Tech giants like Meta, Alphabet, Apple, and Microsoft also didn't comment on the matter.
Israel is enduring somber times in the wake of the horrific terrorist attacks by Hamas.
— Israel – Premier Tech (@IsraelPremTech) October 7, 2023
Our hearts are with the people of Israel during this challenging period. pic.twitter.com/W8a2etshVh
Israel's technology sector
In 2023, Israel's technology sector confronted a slowdown caused by internal political tensions and protests. A significant number of Israeli tech startups have opted to incorporate in the United States.
Currently, there are 500 multinational companies in Israel, primarily focused on research and development, including industry giants like Intel, IBM, Apple, Microsoft, Google, and Facebook, who have acquired Israeli startups.
Israel as a leader in AI & tech sector
The tech and AI sector, where Israel has been a leader, may attract more investment due to its strong connection with military spending, according to Quincy Krosby (Chief Global Strategist of Linsco and Private Ledger LPL).
In the wake of unexpected security challenges, countries tend to focus on improving security systems, potentially leading to increased funding for AI and technology, benefiting both military and private sector tech companies.
Israel tech recovery
The Israeli tech sector has a history of bouncing back, even after facing conflicts with Hamas in Gaza.
Apjit Walia, from DVN Capital (Devon Energy Corporation), highlights that it's good at recovering from tough situations. The Israeli tech industry has historically shown the ability to recover from geopolitical challenges.
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