Israeli military seems to be moving to a war footing that may include a full-scale invasion of the Gaza Strip. The country saw one of the deadliest attacks on Saturday from Palestine terrorists Hamas that left over 900 dead and dozens being taken as hostages. According to analysts and investors, this may result in technology companies operating in Israel fortifying security as they could face disruptions. High-tech industries have for a few decades been the fastest growing sector in Israel and crucial for economic growth, accounting for 14% of jobs, which is almost a fifth of the country’s gross domestic product.
Huge disruption to businesses
“It is a huge disruption to business as usual,” told Jack Ablin, chief investment officer and founding partner at Cresset Wealth Advisors, to news agency Reuters.
Resources may be diverted in the short term
He said that in the short-term resources could be diverted if the conflict expands. As the staff at tech companies are being called up as military reservists. Israel has already said it would call up an unprecedented 300,000 reservists, many of which could come from US-based tech operations.
“We’re preparing for this to take a while,” said Noam Schwartz, the Israeli-born founder and chief executive of ActiveFence, “a tech firm that specializes in online threats with headquarters in New York and Tel Aviv. His company will keep serving customers during the conflict, he said, even as he expects to return to Israel for military duty. “We have enough people worldwide to make sure everyone is in check.”
Need to guard physical installation
Analysts also said that there will likely be a “tremendous effort” to guard physical installations for companies based in Israel from attacks because some technology spending is tied to the military.
US stock market hit
US tech shares were largely down on Monday (October 10), including bellwethers with large operations in Israel.
Intel says monitoring the situation
A spokesperson for chipmaker Intel, which is Israel’s largest private employer and exporter, said that the company was “closely monitoring the situation in Israel and taking steps to safeguard and support our workers.” The spokesperson declined to say whether chip production has been affected by the situation. Intel was the first major company to set up operations in Israel. In June this year, Prime Minister Benjamin Netanyahu said that Intel was planning to spend $25 billion on a new factory in the southern city of Kiryat Gat some 42 km from Gaza. He called it the largest-ever international investment in the country.
Nvidia cancels AI Summit
Nvidia, the world’s largest maker of chips used for artificial intelligence and computer graphics, said it had canceled an AI summit scheduled for Tel Aviv next week, where its CEO Jensen Huang was due to speak. Israel-based Tower Semiconductor, which provides customers with analog and mixed-signal semiconductors, mainly for the automotive and consumer industries, said it was operating as usual.
IBM, Apple, Microsoft, Google and Facebook all have offices in Israel
Israel’s tech sector dates back to 1974 when Intel established a presence. The start-up scene took off in the 1990s, earning a reputation as the world’s second-largest tech center outside of Silicon Valley, with thousands of companies and developing a significant ecosystem. There are now 500 multinationals operating in Israel – mainly research and development centers after buying Israeli start-ups – from Intel to IBM, Apple, Microsoft, Google and Facebook.
May see increase in tech spending in military sector
In the longer term, analysts also see increased investment in the technology and AI sector because of the industries’ close tie-in with military spending. “They will probably increase the investment in AI,” Krosby said. “When a country is caught literally off guard the first thing they look at – beside the obvious problems with intelligence – is what was missed within the security systems,” told Quincy Krosby, chief global strategist at LPL Financials, to Reuters.
(with agency inputs)
Huge disruption to businesses
“It is a huge disruption to business as usual,” told Jack Ablin, chief investment officer and founding partner at Cresset Wealth Advisors, to news agency Reuters.
Resources may be diverted in the short term
He said that in the short-term resources could be diverted if the conflict expands. As the staff at tech companies are being called up as military reservists. Israel has already said it would call up an unprecedented 300,000 reservists, many of which could come from US-based tech operations.
“We’re preparing for this to take a while,” said Noam Schwartz, the Israeli-born founder and chief executive of ActiveFence, “a tech firm that specializes in online threats with headquarters in New York and Tel Aviv. His company will keep serving customers during the conflict, he said, even as he expects to return to Israel for military duty. “We have enough people worldwide to make sure everyone is in check.”
Need to guard physical installation
Analysts also said that there will likely be a “tremendous effort” to guard physical installations for companies based in Israel from attacks because some technology spending is tied to the military.
US stock market hit
US tech shares were largely down on Monday (October 10), including bellwethers with large operations in Israel.
Intel says monitoring the situation
A spokesperson for chipmaker Intel, which is Israel’s largest private employer and exporter, said that the company was “closely monitoring the situation in Israel and taking steps to safeguard and support our workers.” The spokesperson declined to say whether chip production has been affected by the situation. Intel was the first major company to set up operations in Israel. In June this year, Prime Minister Benjamin Netanyahu said that Intel was planning to spend $25 billion on a new factory in the southern city of Kiryat Gat some 42 km from Gaza. He called it the largest-ever international investment in the country.
Nvidia cancels AI Summit
Nvidia, the world’s largest maker of chips used for artificial intelligence and computer graphics, said it had canceled an AI summit scheduled for Tel Aviv next week, where its CEO Jensen Huang was due to speak. Israel-based Tower Semiconductor, which provides customers with analog and mixed-signal semiconductors, mainly for the automotive and consumer industries, said it was operating as usual.
IBM, Apple, Microsoft, Google and Facebook all have offices in Israel
Israel’s tech sector dates back to 1974 when Intel established a presence. The start-up scene took off in the 1990s, earning a reputation as the world’s second-largest tech center outside of Silicon Valley, with thousands of companies and developing a significant ecosystem. There are now 500 multinationals operating in Israel – mainly research and development centers after buying Israeli start-ups – from Intel to IBM, Apple, Microsoft, Google and Facebook.
May see increase in tech spending in military sector
In the longer term, analysts also see increased investment in the technology and AI sector because of the industries’ close tie-in with military spending. “They will probably increase the investment in AI,” Krosby said. “When a country is caught literally off guard the first thing they look at – beside the obvious problems with intelligence – is what was missed within the security systems,” told Quincy Krosby, chief global strategist at LPL Financials, to Reuters.
(with agency inputs)
