Despite War, Israel Sees Surge in Multibillion-Dollar Defense, Tech, Energy Deals in 2025

Despite predictions that the Gaza war would isolate its economy, Israel in 2025 signed a series of multibillion-dollar defense, technology, and energy deals with Western and Arab powers, extending commercial ties even amid massive diplomatic pressure.

Israeli technology acquisitions and public listings totaled nearly $59 billion in 2025, a jump of roughly 340% from the previous year, according to a PwC Israel report released last week, driven by multibillion-dollar deals in cybersecurity, insurance, and fintech and a rebound in IPOs. Multibillion-dollar missile defense, artillery, and munitions contracts were signed with Germany, Greece, and Gulf partners. Israel also approved a natural gas deal worth tens of billions of dollars with Egypt, its largest energy export to date.

Venture capitalist and former Knesset member Erel Margalit said Israel’s innovation economy “proved its resilience” in 2025, “against war, geopolitical pressure, and repeated predictions of slowdown.”

Alphabet’s blockbuster $32 billion acquisition of Israeli cybersecurity firm Wiz was one of the largest cyber transactions on record and accounted for a significant share of Israel’s tech dealmaking in 2025. But even excluding the Wiz deal, Israeli tech exits more than doubled to around $32 billion, according to PwC Israel, including six additional buyouts valued at more than $1 billion and seven IPOs of Israeli-founded companies with a combined valuation of $14.6 billion, up from just $781 million a year earlier.

The momentum also extended to long-term foreign investment. US chip giant Nvidia announced last week that it will build a “multi-billion shekel” R&D campus in northern Israel, expected to become second in size only to the company’s Silicon Valley headquarters. The site, slated to break ground in 2027 near Kiryat Tivon, will employ more than 10,000 people. Founder and chief executive Jensen Huang has described Israel as Nvidia’s “second home,” saying the country is “home to some of the world’s most brilliant technologists.”

Nvidia also committed about $1.5 billion to build Israel’s largest data center in the Galilee, which will house a new supercomputer supporting its AI development. The announcement comes amid reports that Nvidia has agreed to acquire AI chip startup Groq for about $20 billion in cash, in its largest-ever deal. 

Referring to the Israeli R&D center, Huang said: “Our new campus will be a place where our teams can collaborate, invent, and build the future of AI.”

In defense, several large contracts were finalized in recent weeks. Germany last week approved a multibillion-dollar expansion of its purchase of Israel’s Arrow-3 missile defense system, increasing the total value of the agreement to about $6.5 billion, the largest defense export in Israel’s history. Greece last month approved the purchase of PULS launchers from Elbit Systems in a deal valued at about $755 million. In a separate, highly secretive deal, the defense giant last month signed its largest-ever contract, a $2.3 billion agreement to supply an advanced strategic system to a foreign customer widely reported to be the United Arab Emirates.

Energy was another area where Israel closed the year with a headline-making agreement. Israel last week approved a $35 billion natural gas export agreement with Egypt, the largest such deal in the country’s history. Under the agreement, partners in Israel’s Leviathan offshore project, led by Chevron, will supply Egypt with about 130 billion cubic meters of gas through 2040. Roughly half of the proceeds, estimated at 112 billion shekels, will flow to the Israeli state. Prime Minister Benjamin Netanyahu said the deal “greatly strengthens Israel’s position as a regional energy power” and would funnel tens of billions of shekels into the economy and public services.

Egyptian officials, whose government has acted as a mediator in the Israel-Hamas conflict, stressed that the agreement is a commercial transaction “with no political aspects.”

Margalit said the scale of dealmaking in 2025 reflected a return to fundamentals rather than speculative excess. “This was not a hype cycle,” he told The Algemeiner, “but a reaffirmation of Israel’s ability to build technology, particularly in advanced AI verticals, for the hardest and most regulated parts of the real economy: cybersecurity, fintech, insurance, defense, and energy.”

“In these fields, trust, precision, and accountability decide outcomes, and that is why global capital and strategic partners returned to Israel at scale,” he added.