Nvidia Distorts Israel Data With $20 Billion Export Pace, Economists Warn
Updated
Updated · Ynetnews · Jun 30
Nvidia Distorts Israel Data With $20 Billion Export Pace, Economists Warn
2 articles · Updated · Ynetnews · Jun 30
Summary
Israeli economists say Nvidia’s local operations are making headline growth, tax and deficit figures look far stronger than much of the wartime economy actually is.
Mellanox exports booked in Israel despite goods not crossing its borders reached nearly $10 billion in 2025 and were nearing a $20 billion annual pace in early 2026.
Yonatan Katz estimates that activity added at least $1.5 billion in tax revenue and helped lift the state revenue forecast by about NIS 7 billion, supporting a faster-than-expected deficit decline.
Alex Zabezhinsky calculates that without that exceptional activity, Israel’s 2025 growth would have been 1.6% instead of 2.9%, and first-quarter 2026 GDP would have shrunk 10.5% rather than 3.8%.
The economists warn that reliance on one AI-linked company can mask weakness in most sectors, encourage permanent spending on temporary revenues and leave Israel exposed to shifts in Nvidia, global tax rules or the AI cycle.
Is Israel's tech-fueled growth a sustainable miracle or a dangerous economic bubble?
How can one company's success create a 'macro illusion' for an entire nation?
Israel’s Economic Boom or Macro Illusion? The $4.5 Trillion Nvidia Factor and Its National Impact (2025–2026)
Overview
Israel's economy in 2025-2026 is experiencing a strong upswing, largely driven by the global technology boom and the remarkable rise of Nvidia. As Nvidia becomes the world's most valuable company, its rapid growth and the soaring demand for its AI chips have created significant ripple effects in Israel. This has transformed local regions, such as Kiryat Tivon, into new tech hubs and fueled optimism about the nation's financial health. However, the report highlights that this apparent boom may mask underlying risks, as much of the growth is concentrated in the high-tech sector and heavily influenced by a single dominant company.