Israel's Finance Ministry has raised its 2025 GDP growth forecast from 1.6% to 2.9%, citing the significant impact of Nvidia's local operations. The company's presence in the country is anchored by Mellanox, which Nvidia acquired for $6.9 billion in 2020.
Nvidia's networking division, largely based in Israel, is expected to generate $20 billion in revenue in 2025, with projections exceeding $40 billion for 2026. The segment previously recorded roughly $15 billion in quarterly revenue.
The company currently employs about 6,000 people in Israel. In the last fiscal year, Nvidia paid approximately $1.28 billion in local taxes, contributing to stronger-than-expected government revenue collections.
While the high-tech sector accounts for about 18% of Israel's GDP, economists warn that reliance on a single firm's intellectual property exports may overstate economic momentum. The government is now seeking to diversify its AI ecosystem.
