Yesterday, we woke up to a headline that swells the Israeli chest with pride: Armis is being sold for a staggering $7.75 billion.
Beyond the immense local pride and the achievement for the founders and employees, there is a bottom line that interests every citizen: the state, a "silent partner" in every such success, is about to reap a significant windfall. While the exact tax revenue is not yet apparent due to ownership structures, estimates suggest it will exceed hundreds of millions of dollars.
In Israel's complex economic reality of 2025, with a ballooning deficit and massive defense expenditures, this sum is a lifeline. The temptation for decision-makers at the Finance Ministry will be almost uncontrollable: to use the money to cover current expenses, plug a budget hole, fund a coalition agreement, or simply let the deficit swallow it.
We must not let this happen.
What Israel should use the Armis tax revenue for
Using tax revenue from the Armis sale for current expenses is akin to a farmer eating the seeds meant for next year's planting. He will be full today but starve tomorrow. These billion shekels are not "spending money"; they represent potential for a national investment that must flow back into the ecosystem that created it. This is the only way to ensure Armis isn't a "one-hit wonder," but a link in an endless chain.
The hi-tech industry is crying out for investment in several critical growth engines:
- The war on talent: We are in the midst of a quiet but consistent brain drain. Scientists, researchers, and senior tech executives are receiving tempting offers overseas. The state needs to use this money to create aggressive grants and incentives to keep talent here and bring them back home. Without these people, there is no hi-tech.
- Investing in deep tech: The world isn't waiting for us. The next revolution is in Quantum Computing and advanced AI. These fields require expensive infrastructure and long-term investment that the private market struggles to fund alone in the early stages. This is where the state must step in to bridge the gap.
- Deepening academic knowledge: Today, outstanding students are snatched up by the industry immediately after their bachelor's degree due to high salaries. The result? A shortage of researchers with advanced degrees (MSc and PhD) who will create the scientific breakthroughs of the next decade. Generous living stipends must be allocated to top students who choose to stay in academia and deepen their research.
- The next generation – math and excellence: You cannot build a tower without foundations. This money needs to fund programs strengthening five-unit math tracks and excellence programs in the periphery and the center. The tech leaders of 2035 are sitting in an 8th-grade classroom today, and they need the best tools available.
- A lifeline for early-stage start-ups: Recent data is worrying. The time between Seed funding and Round A has lengthened significantly. This is considered the "Valley of Death" for Israeli innovation. Excellent companies with groundbreaking ideas fall here simply because they run out of air. Part of the money must be channeled as dedicated grants to the Israel Innovation Authority to support this specific critical stage.
Each of these engines is vital to Israeli hi-tech remaining a global leader. The Armis sale is a golden opportunity. The finance minister and economic leaders must view it not as a momentary bonanza, but as fuel for the economy's growth engine.
Much has been said about the importance of high-tech to the nation. If we wisely reinvest this money back into industry, education and research, we will see returns compounded by ten more companies like Armis in the coming decade.
If we consume this money today, we will be left only with today's headlines.
The writer is the CMO of Sela, a leading global provider of Cloud and AI services for technology companies.