Will New US Leadership Expand the Abraham Accords and Boost Israeli Tech?

2025-01-19

The Middle East is no stranger to geopolitical shifts, but the return of Donald Trump to the US presidency in 2025 has sparked fresh optimism for regional stability and economic growth. With a pro-business agenda and a focus on deregulation, the new administration is expected to breathe new life into the Abraham Accords, potentially opening doors for Israeli tech entrepreneurs to access untapped markets, capital, and strategic partnerships.

Yaniv Stern, Managing Partner at Red Dot Capital Partners, shared his insights on the evolving landscape during CTech’s 2025 VC Survey. According to Stern, the winds of change are already palpable, even before the new administration officially takes office. “The expansion of the Abraham Accords will deepen collaboration around technology and innovation,” he noted. “Israeli entrepreneurs will benefit from new markets, capital sources, and partnerships.”

Key Insights

1. 2024 Recap: Despite global tech challenges and regional instability, Israel’s tech ecosystem outperformed Asia and Europe, showcasing resilience and innovation.
2. 2025 Outlook: The Israeli tech sector is poised for stability, with a focus on capital efficiency and market leadership across sectors like cybersecurity, quantum computing, and defense tech.
3. US Leadership Impact: The pro-business stance of the new US administration is expected to expand the Abraham Accords, fostering regional collaboration and opening new opportunities for Israeli entrepreneurs.
4. Government Actions: Stern emphasized the need for political stability, streamlined visa processes, and reduced barriers for international investors to accelerate Israel’s tech growth.
5. Emerging Sectors: Quantum computing and defense tech are gaining momentum, while B2C and B2G sectors are expanding, driven by companies like Travelier.
6. AI Revolution: Israel is actively participating in the global AI race, with a focus on responsible AI and infrastructure optimization.
7. IPO Prospects: Analysts predict a resurgence in IPOs in 2025, contingent on US economic conditions and equity valuations.
8. Investment Trends: Opportunities exist across early-stage and mature companies, with a growing interest in AI and SaaS monetization platforms like Stigg.
9. Notable Companies: Quantum Machines and Finout are highlighted as companies to watch in 2025, with strong growth potential in quantum computing and cloud cost management.

What Undercode Say:

The return of Donald Trump to the US presidency marks a pivotal moment for the Middle East and Israeli tech. His administration’s pro-business policies and commitment to expanding the Abraham Accords could catalyze unprecedented growth in the region. For Israeli entrepreneurs, this translates to access to new markets, capital, and strategic partnerships, particularly in sectors like quantum computing, defense tech, and AI.

However, the success of this vision hinges on several factors. First, the Israeli government must prioritize political and judicial stability to attract international investors. Second, reducing friction for visitors and businesses, such as simplifying visa processes and modernizing tax codes, will be critical. Finally, fostering innovation in emerging sectors like quantum computing and AI will ensure Israel remains a global leader in technology.

The global tech landscape is evolving rapidly, and Israel’s ability to adapt will determine its future competitiveness. With a strong foundation in cybersecurity, cloud infrastructure, and enterprise software, Israel is well-positioned to capitalize on emerging opportunities. However, the country cannot afford complacency. As Stern pointed out, the AI revolution is reshaping industries, and Israel must continue to innovate to stay ahead.

The anticipated IPO resurgence in 2025 could provide a much-needed boost to the tech ecosystem, offering liquidity and attracting new investors. Companies like Quantum Machines and Finout are emblematic of Israel’s potential to lead in cutting-edge fields. Quantum Machines, with its advanced quantum computing solutions, is poised to benefit from the growing demand for efficient control systems. Similarly, Finout’s innovative approach to cloud cost management positions it as a key player in the FinOps space.

In conclusion, 2025 holds immense promise for Israeli tech, but realizing this potential will require collaboration between the government, investors, and entrepreneurs. By addressing regulatory challenges, fostering innovation, and leveraging international partnerships, Israel can solidify its position as a global innovation hub. The winds of change are blowing, and for those ready to seize the opportunity, the future is bright.