By the time the first desk was set up in the empty office at Kela in 2024, employees were already in action on the battlefields in defense of Israel, and once in the office, they began turning combat tested lessons into technologies that redefine military, AI, and space capabilities globally.
Israel’s military wars, from Gaza to Lebanon, have hastened the development of Israel defense systemthat transforms battlefield experience into products for both domestic use and international markets.
The technology of the Israel defense industry went from being used in Gaza to building AI ties with Azerbaijan, Israel is expanding its influence beyond the killing of the innocent into civilian lives outside the region. And to top it all off, the events that are taking place are in defense of Israel, which in this case no one is a threat to it but rather the opposite.
Tech Israel Defense Companies Under Fire
Kela’s engineers configured fiber optic drones to tackle problems they had seen firsthand, including electronic jamming and signal loss, rapidly deploying prototypes to troops while pitching solutions to foreign militaries.
The approach of “iteration under fire,” as explained by the president of Kela, Hamutal Meridor, reflects the fast pace of testing, adapting, and deploying technology in Israel defense system situations.
The demand for Israeli defense tech has surged, fueled by innovations like robotics, drones, and AI systems that proved crucial during the Hamas attacks on Israel in 2023. Start-ups like Robotican and SmartShooter moved swiftly to support the military, converting battlefield lessons into commercial products and international Israel defense contractors.
In 2025, Israel defense companies stocks attracted a record-breaking investment of $15.6 billion, which faced an increase from the $12 billion received the year before. The Israel defense budget was big on this incident because the return would be even bigger.
Industry experts predict that with everything happening and the as the United States and other North Atlantic Treaty Organization (NATO) surge in defense budget Israel along with state-owned arms manufacturers more partnerships will be taking place.
On the other hand, this will increase in the Israel defense spending, to attract more use of war tech to transform it to domestic use.
In defense of Israel, AI Spreads Globally
In defense of Israel, the state recently signed a Memorandum of Understanding (MoU) on AI with Azerbaijan, aiming to boost supercomputing infrastructure, civilian applications, and joint research.
Prime Minister Benjamin Netanyahu emphasized, “AI is not the instrument of the future. It’s the instrument of the present that is rushing towards tomorrow. We have to make sure that we are among the leading nations in this field.”
The partnership demonstrates the ability of the Israel defense industry to translate military innovation into international influence.
Head of the National Artificial Intelligence Directorate, Brig. Gen. (Res.) Erez Askal added that “the State of Israel and the Republic of Azerbaijan share extensive cooperation based on mutual appreciation and trust, as well as shared challenges.”
Askal continued to state that, “Cooperation on AI is an important additional layer between our countries, as it marks the future of two nations with unique challenges, which can lead to life-changing solutions for their citizens and even the entire world. Prime Minister Benjamin Netanyahu has defined AI as a field in which Israel will be a global leader, and we intend to meet that goal.”
Eyes in the Sky
In defense of Israel, the state is also enhancing its space-based capabilities to maintain its strategic advantage in future conflicts.
According to the head of the Defense Ministry’s Space Office, Avi Berger, satellites are now the backbone of the Israeli intelligence network, providing high resolution imagery on all fronts and enabling rapid analysis through AI.
“We knew right away that we had to build and create new surprises for the next war,” Berger said, adding that “whatever was deployed in June won’t be enough next time. The IDF now has new capabilities – and we can’t forget that the enemy will be different next time around, too.”
Space technologies, from electro-optical satellites to advanced reconnaissance systems, have become critical to both security and economic strategy.
According to The State of the Israeli Space Industry 2026 report, “In 2026, space technology is no longer a niche market but a fundamental pillar of global economic and security infrastructure.”
These Israel defense budget investments ensure that technology, created in war, continues to influence global defense, AI, and civilian applications.
From drones in Gaza to AI partnerships with Azerbaijan, and from robotics to space intelligence, Israel defense industry tech sector shows how a war driven innovation can extend far beyond the battlefield, reshaping regional power and global influence while connecting military experience to civilian and commercial life worldwide.
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