Mellanox founder urges government change to protect Israel’s tech sector

Mellanox founder Eyal Waldman has called for a change in Israel’s government, warning that the country’s ability to retain technology companies and skilled workers is at risk. Speaking at Birthright Israel’s international business summit in Tel Aviv, the entrepreneur said continued leadership under Prime Minister Benjamin Netanyahu would leave Israel in “serious trouble.”

Nearly a week after Israelis voted, the composition of the next government remains uncertain. Parties opposing Netanyahu together control 67 seats in the 120-member Knesset, while his alliance of right-wing and ultra-Orthodox parties holds 53. Despite their numerical advantage, opposition parties face ideological disagreements and competing campaign commitments that complicate efforts to assemble a coalition.

Waldman, whose chipmaker Mellanox was acquired by Nvidia, accused the government of undermining democratic principles and deepening Israel’s international isolation. He argued that those conditions hurt businesses seeking to operate and invest in the country. In remarks to The Times of Israel at the summit, he said replacing Netanyahu would improve Israel’s standing abroad and make fundraising and expansion easier for local startups.

His warning comes as concerns grow that potential sanctions could push more Israeli startups and technology businesses to relocate operations overseas, taking engineers, managers and other skilled employees with them. Waldman highlighted increasing pressure in Western countries for economic measures over Israeli government policies in Gaza and the West Bank.

In September, the United Kingdom announced a prohibition on trade with Israeli settlements following a wave of settler attacks against Palestinians and extensive settlement construction approved by Netanyahu’s government. Another 12 Western countries announced plans to introduce or support similar restrictions.

The stakes are significant for an economy whose resilience during three years of regional war has depended heavily on technology. The sector accounts for roughly 20 percent of Israel’s gross domestic product and about half of its exports, while also providing substantial tax revenue. Addressing the summit, Finance Ministry Budget Commissioner Maharan Frozenfar credited the country’s distinctive human capital as the main source of its economic resilience. The event drew 350 investors, entrepreneurs, senior executives and philanthropists from more than 15 countries.

Frozenfar said the ministry was developing a five-year economic strengthening plan that would proceed regardless of which government takes office. Its priorities include technology and artificial intelligence, quantum technology, infrastructure, transportation, and small and medium-sized businesses. Critics have accused the Netanyahu government of failing over the past four years to advance reforms supporting growth in education, health and public transportation.

Waldman also called for stronger leadership to improve education, saying standards had declined. His daughter was murdered in the Hamas massacre at the Nova music festival on October 7, 2023. He argued that a coalition excluding Netanyahu could create opportunities for regional diplomacy, including resolving disputes with Lebanon and Syria, bringing Saudi Arabia into the Abraham Accords and addressing the Israeli-Palestinian conflict.