Israeli AI Companies Drew $11.8B, Taking 89% of Tech Investment

Israel’s high-tech investment market became overwhelmingly concentrated in AI in 2025: the category took about 89% of all funding, up from 58% a year earlier. The shift followed approximately $11.8 billion invested in Israeli AI companies across roughly 500 rounds.

The figures come from DatA-IL’s second annual report, prepared with research firm IVC. They place AI at the center of Israel’s private high-tech financing activity rather than alongside several similarly funded technology categories.

Capital moved toward later-stage companies

About 57% of the capital raised by Israeli AI companies in 2025 went to late-stage rounds. That funding split places most of the year’s AI investment in companies beyond their earliest financing stages, even as the report counts a far larger pool of AI businesses across the country.

A wide AI company base, with a smaller foundational tier

DatA-IL counts 2,948 AI companies operating in Israel. Of those, 365 are classified as core AI companies developing infrastructure, language models or other foundational technologies, separating builders of underlying technology from the broader AI-company total.

The investor base

• 1,281 funds and investors participated in the reported AI financing rounds.
• More than half of those participants were foreign investors.

Government policy now accompanies the funding shift

Israel has approved a National Artificial Intelligence Plan that defines AI as a geopolitical and security asset. The government also established a National Artificial Intelligence Directorate in the Prime Minister’s Office, backed by a NIS 120 million budget.

The picture is one of concentration: AI attracted nearly nine-tenths of high-tech investment, and later-stage rounds received most AI capital. The figures also show a sector spanning foundational technology developers and a much wider set of AI businesses.