Full Breakdown
Potential U.S. Sanctions Threaten Israel’s High-Tech Sector
By Drooid · · How we work
Core Warning at the IATI Venture Summit
At the Israel Advanced Technology Industries (IATI) annual venture capital summit, held during EY’s Journey 2026 conference, Yisrael Beytenu chairman Avigdor Liberman warned that if Israel’s current diplomatic trajectory continues, the United States could recognize a Palestinian state and begin imposing sanctions within two years. Liberman linked such a move to “devastating consequences” for the nation’s high-tech industry, which depends on global investors, clients, and partnerships. He also said Britain was already discussing possible sanctions against Israeli banks.
High-Tech’s Economic Significance
The summit gathered managing partners and executives from approximately 200 venture-capital funds operating in Israel, underscoring the sector’s role as a key economic engine.
Reform Proposals from Liberman and Bennett
Liberman called for an emergency joint initiative involving the Israeli government and overseas Jewish communities to improve Israel’s diplomatic image. He urged expanding opportunities for domestic institutional investors to fund startups, reducing bureaucracy, and consolidating securities and capital-market regulators. Domestically, he advocated universal military or civilian national service, mandatory core-curriculum studies for state-funded schools, and drafting a constitution within six months for a national referendum.
Bennett, leading the Beyachad party, focused on retaining Israeli entrepreneurs abroad and attracting Jewish professionals worldwide. He proposed broader political and regulatory stability, a centralized mechanism for companies to report bureaucratic obstacles, and enhanced education in advanced mathematics, English, physics, and practical artificial-intelligence curricula. Bennett also expressed reservations about directing pension savings toward high-tech investment, insisting that savers’ returns must remain paramount.
Official Statements & Responses
IATI president Karin Mayer Rubinstein said the upcoming elections present an opportunity to place the future of Israeli high-tech at the center of the national agenda, stressing the need for regulatory certainty and competitive business conditions. EY Israel co-CEO Noam Kanti described the industry as confronting security challenges, political uncertainty, currency fluctuations, and rapid AI-driven transformation. Former minister Izhar Shay reflected on the loss of his son, Staff-Sgt. Yaron Ori Shay, who was killed in battle on October 7, 2023, highlighting the broader security context affecting the sector.
Verbatim Quotes
- “An industry like high-tech requires mobility, the ability to fly, communicate, and be accepted by the international community,” — Avigdor Liberman, chairman
- “High-tech holds up the country and the economy,” — Naftali Bennett, former prime minister