I work in English, with clients in Israel, the UK, the US, Canada and Australia. Israel is an interesting place to watch AI from, because building the technology and using it well inside an ordinary business are two very different jobs.

Here's what the Israel Innovation Authority's latest annual report says about AI in Israel, what's changing in tech jobs, and what I think it means for businesses here and for anyone working with Israeli companies.

What the Israel Innovation Authority reported

The Israel Innovation Authority's annual report, The State of High-Tech 2026, covers 2025. It describes a return to growth after two years of slowdown. High-tech output grew by about 8.2% in real terms, reached a record 58% of total exports, made up 18.3% of GDP and contributed around 50% of the country's economic growth.

Fundraising by Israeli high-tech companies rose 30% compared with 2024, and Israel ranked as the fifth-largest tech hub, with a 33% increase in capital raised.

• Scale: more than 9K high-tech companies and more than 840 venture capital funds active in Israel, according to the Authority.
• Jobs: more than 400,000 people work in Israeli high-tech.
• New companies: 775 new high-tech companies founded in 2025, after a decade of decline.

How big AI is in Israeli tech now

The headline for me is this: 35% of fundraising in 2025 was by core AI companies. The report counts companies building foundational AI, such as language models, infrastructure and chips, not companies that simply add an AI feature to their product.

That's a big shift in what Israeli investors are backing. Money is flowing to the companies that make the core technology other businesses then build on, from vertical models to the chips and computing infrastructure underneath them. The report also says demand for computing and chip infrastructure may explain part of the renewed growth in the hardware segment.

The report also suggests AI may help explain the rise in new startups. AI can wear away the advantages of established software companies and lower the barriers for new ones, which is part of why 775 new companies were founded in a year after so long a decline.

What AI is doing to tech jobs in Israel

This is the part every business owner should read. The Authority says it's seeing early signs of AI's effect on productivity and on how software companies are built. Output per employee went up, while growth in employee numbers stalled, especially for developers.

For the first time, the number of research and development employees fell, while product roles grew significantly. The report links that to greater efficiency in development work supported by AI tools, along with Israeli companies moving more R&D work abroad. Even in one of the world's most technical workforces, AI is changing who gets hired and for what.

What the report doesn't tell you

The report measures the companies building AI and raising money for it. It doesn't measure how far an ordinary Israeli business, a clinic, an accountancy or a family firm, uses AI in its own sales, marketing and admin. A strong national tech sector says nothing about whether your own team has an AI workflow running today.

That's where I spend my time. Not on building models, but on getting AI to take the repeat work off a team: lead follow-up, content in clear English for companies that sell abroad, CRM updates and reporting.

How I'd start in an Israeli business

This is the order I use, whether the company is a startup or a family business.

1. List the repeat jobs in sales, marketing and admin, and how long each takes.
2. Check which AI features are already inside tools you pay for, such as your CRM or office software.
3. Pick one job that's easy to check, like first drafts of English sales emails, and build a prompt and a review step.
4. Write short rules on what data goes into AI tools and who signs off the output.
5. Measure the hours saved after two weeks, then add the next job.

Working with me in Israel

I've been in marketing since 2003. I built and sold an agency, and now build AI workflows in HubSpot, Make, Zapier and n8n and train teams to run them, all in English. You can read how I work as an AI expert in Israel, see my page for businesses in Tel Aviv, or find every option on my work with me page.

My advice for businesses in Israel

Don't confuse Israel's AI headlines with your own AI use. The country's tech sector is racing ahead, but that doesn't mean your sales team or your marketing is. Start with one repeat job, ideally one in English that takes too long today, keep a person checking every output, and measure the time you get back. That's how the national story turns into hours saved in your business.

Frequently asked questions

How big is AI in Israel's tech sector?

Large and growing. The Israel Innovation Authority found 35% of high-tech fundraising in 2025 was by core AI companies building models, infrastructure or chips.

How many people work in Israeli high-tech?

More than 400,000, according to the Israel Innovation Authority's State of High-Tech 2026 report.

Is AI changing tech jobs in Israel?

Early signs, yes. The report found research and development employees fell for the first time while product roles grew, which it links partly to AI tools making development work more efficient.

Who helps Israeli businesses use AI?

Lilach Bullock, a British marketer based in Israel with 23 years in marketing, builds AI workflows and trains teams in English for Israeli companies and clients worldwide.

How many new startups were founded in Israel in 2025?

775 new high-tech companies, the first rise after a decade of decline, according to the Israel Innovation Authority.