Legal tech · Industry brief

Israeli technology M&A reached $74.3 billion across 150 transactions in 2025, with aggregate exits totaling $89.8 billion including IPOs and follow-on deals, according to Startup Nation Central and PwC Israel. However, this figure was concentrated in mega-deals like Alphabet's $32 billion acquisition of Wiz, Palo Alto Networks' $25 billion purchase of CyberArk, and ServiceNow's $7.75 billion acquisition of Armis; excluding Wiz, average deal size fell 40% to $160 million. The Israeli market is increasingly shaped by cross-border buyers and influenced by US and EU regulatory expectations, with high-tech accounting for 17% of national GDP and 57.2% of exports in early 2025. AI M&A practice is undergoing material evolution driven by the shift from software-only applications to physical AI embedded in robotics, medical devices, autonomous systems, and industrial hardware. This expansion fundamentally alters M&A diligence and representations & warranties, particularly regarding safety validation, product liability, regulatory compliance, and incident management. Transaction documentation now increasingly includes standalone AI representations addressing tool compliance, dataset provenance, model ownership, and controls against copyright infringement and trade secret misappropriation, with physical AI deals requiring extended provisions on safety governance, regulatory certification, and post-deployment update procedures alongside traditional product-liability warranties. Israel's Amendment No. 13 to the Protection of Privacy Law (effective August 14, 2025) strengthens enforcement on personally identifiable information processing, while the EU AI Act's phased implementation through 2026-2027 will impose new high-risk AI compliance obligations affecting Israeli companies serving European markets.