Israeli hi-tech companies accounted for 58% of Israel’s total exports in 2025, according to the annual report on the state of hi-tech published on Sunday by the Israel Innovation Authority.
The trend is driven mainly by the sector's dominance of Software-as-a-Service (SaaS) projects, which export these services overseas and are highly dependent on foreign-currency income.
And the report also reflects the severity of Israel’s currency situation, with the shekel's growing strength being one of the reasons the sector might face a tougher year, with some companies anticipating possible cuts.
The report also highlighted that, even if service exports remain Israel’s main hi-tech commodity, hardware exports grew the most over the last year, with output increasing by NIS 16 billion.
In percentage points, this represented growth of 20,7% for manufacturers of computers, electronics, and optical equipment, and 12,5% for manufacturers of aircraft, spacecraft, and related equipment.
Additionally, hi-tech companies accounted for 50% of the economy’s growth in 2025, with total output in the sector growing 8.2%, from NIS 324 billion in 2024 to NIS 352 billion over the last year.
This also reflects growing trends in the hi-tech sector’s influence on Israel’s total Gross Domestic Product (GDP), with the sector accounting for 18,3% of GDP (17.7% higher than in 2024).
The report also revealed that 2025 was a record year in terms of total funds raised by start-ups, with $84 billion raised throughout the year - a 256% increase in comparison with 2024’s report -.
Artificial intelligence impacts R&D, hi-tech job market
The report also warned of the impact of artificial intelligence on the hi-tech job market, noting that the research and development (R&D) sector suffered its first decline in an Innovation Authority report.
In total, there was a decline of 3,500 employees in R&D positions, while the main gain was reported among employees in product roles, with 15,000 more positions registered in 2025.
This aligns with some of the industry's latest developments, such as Wix's decision to cut 20% of its employees, citing ”AI restructuring.”
According to CEO Avishai Abrahami, the company is now introducing new positions, such as "Xengineer and Creators," whose roles were "designed from the ground up around AI-native ways of working." But these new positions require a "faster-moving structure" than what Wix has been using.
"We are moving to a structure with fewer levels between any member of our leadership and the most junior person on the team. Fewer layers means faster decisions, clearer ownership, and less distance between the people setting direction and the people building the product - but it also means a smaller number of people," Abrahami explained.
Abrahami also said that the main reason for the layoffs was the dollar-shekel situation, with the company having shekel-dominated costs and dollar-denominated revenue, making it impossible to keep its current operations running without cutting some of its Israeli operations.
"This creates a structural pressure on our ability to operate at our current scale. It is a reality that directly shapes what is sustainable for our company," he added.