What's Your Number? – "A New Era for Defense Tech?"

Release Date: May 7, 2025
Hosts: Yonatan Adiri and Michal Avram
Podcast Description: Hosted by Yonatan Adiri and Michal Avram, What’s Your Number? is a weekly podcast from Ark Media that examines the Israeli economy through a global perspective.

Introduction: Setting the Stage

The episode kicks off with the hosts engaging in their signature "What's Your Number?" segment, where they each present a significant figure representing key topics for the week. Yonatan starts on a somber note, highlighting the recent wildfires in Israel:

Yonatan Adiri [00:12]: "It's 5,000 acres... the largest fire we've seen in 15 years here in Israel."

Michal balances the conversation with a more optimistic figure related to Israeli defense technology investments:

Michal Avram [00:36]: "My number is 11 million. That's $11 million for Israeli defense tech startup Kela's seed round..."

Choosing to focus on the positive impact of defense tech over the devastating wildfires, the hosts set the tone for a discussion that intertwines economic indicators with pressing national issues.

Market Signals: Gauging the Economic Climate

The hosts delve into key economic indicators affecting Israel:

• Currency Exchange Rates:

  • Dollar to Shekel: Increased slightly to 3.62 from the previous week's 3.60.
  • Euro to Shekel: Rose marginally to 4.11 from 4.09.

• Stock Market Performance:

  • Nasdaq: Experienced a 4.1% weekly increase.
  • Notable Corporate Moves: Apple reduced its share buyback program by $10 billion, while Microsoft and Meta reported strong earnings, indicating a mixed yet resilient market environment.

Yonatan observes the resilience of the stock market:

Yonatan Adiri [04:06]: "The S&P recovered all of its collapse since Liberation Day... an interesting sign."

Michal adds optimism with the latest U.S. jobs report exceeding expectations, suggesting pockets of strength amid broader economic uncertainties.

What's Your Number Index (Windex): Tracking Israeli Companies Globally

The Windex measures the stock performance of 50 publicly traded Israeli companies on U.S. exchanges. This week, the index saw a 3.1% growth, outperforming the S&P but slightly lagging behind Nasdaq.

Yonatan highlights a standout performer:

Yonatan Adiri [05:01]: "Digital Cosmetics high flyer Il Maage grew 44%, rising beyond its July 2023 IPO for the first time."

Il Maage's impressive growth underscores the diversity of Israeli innovation beyond traditional tech sectors, showcasing strengths in consumer markets like cosmetics.

Big Shorts: Key Headlines Impacting Israel's Economy

1. Wildfires Outside Jerusalem

Recent wildfires burned approximately 5,000 acres near Jerusalem, marking the largest fire in Israel in 15 years. The discussion encompasses:

• Economic Impact: Comparisons to the devastating LA fires, which resulted in property and capital losses estimated at $131 billion.

• Policy and Response:

  • Yonatan praises Israel's improved firefighting infrastructure, contrasting it with the 2010 Carmel Ridge fire, which led to significant reforms.

  • Quotes:

    Yonatan Adiri [09:19]: "We've bought 14 airplanes. There's a national hierarchy, trainings, processes..."

  • Michal introduces Fire Dome, an Israeli company innovating in fire retardant technologies inspired by the Iron Dome system.

2. U.S. Economy Contraction and Its Implications

The U.S. GDP contracted by 0.3% in the first quarter of 2025, raising concerns about a potential recession. Key points include:

• Impact on Israel:

  • The U.S. is a major market for Israeli exports, especially in the tech sector.
  • A weak dollar combined with potential tariffs could pose significant challenges for Israeli businesses.

• Strategic Partnerships:

  • Yonatan emphasizes the need for Israel to expand its alliances beyond the U.S., highlighting opportunities with Germany and India to mitigate economic risks.

  Yonatan Adiri [17:47]: "We need to expand and broaden its strategic relationships with countries... Germany and India."

• Diplomatic Dynamics:

  • The inability to engage with China without straining U.S. relations presents a diplomatic tightrope for Israel.

Long Play: Deep Dive into the Defense Tech Sector

The centerpiece of the episode explores the burgeoning Israeli defense technology sector, drawing parallels with the evolving landscape in the U.S.

1. Paradigm Shift in Defense Procurement

Yonatan outlines a significant transformation in how militaries procure and integrate technology:

Yonatan Adiri [20:27]: "We're in a paradigm shift when it comes to procurement... similar to the RMA post-Vietnam."

• U.S. Perspective:

  • Companies like Palantir and Anduril have navigated procurement challenges, exemplifying the integration of Silicon Valley innovation into defense.

• Israeli Perspective:

  • Israel boasts a robust defense ecosystem with key players such as IAI, Rafael, and Elbit, each contributing to cutting-edge technologies like the Iron Dome, David's Sling, and Trophy tank protection systems.

2. Innovation and Startups

The war environment has accelerated innovation, leading to the emergence of over 160 startups in the defense sector within 48 months. Notable startups include:

• Regulus: Focused on electronic warfare and anti-drone systems.
• Extended Tactical Drones: Enhancing battlefield capabilities.
• Smart Shooter: Revolutionizing soldier-assault rifle technology.

Yonatan Adiri [31:09]: "These are startups coming up... a lot more money locally and globally..."

3. Strategic Alliances and Future Prospects

Yonatan emphasizes the strategic importance of alliances with Germany and India, who are becoming pivotal partners in defense technology and economic collaboration. The collaboration includes significant defense contracts and joint technological developments.

Yonatan Adiri [33:14]: "The investment and the innovation... meant to promote more peace in the world and meant to be a deterrent."

The hosts discuss how Israel's proactive approach in defense tech not only serves immediate security needs but also positions the country as a formidable player in global defense innovation.

Words of the Week: Championing Free Speech

The episode concludes with a poignant moment addressing free speech. Michal cites Palantir CEO Alex Karp's response to a protester, highlighting the importance of engaging openly with criticism:

Michal Avram [34:06]: "Alex Karp... was responding to... accusing him and his company of using AI to kill Palestinians."

Yonatan supports Karp's stance on defending one's position:

Yonatan Adiri [35:11]: "If you can defend your position, you shouldn't be shy."

This segment underscores the podcast's commitment to addressing complex and sensitive issues with integrity and openness.

Conclusion

What’s Your Number? successfully navigates the intricate interplay between Israel's economic indicators, national challenges, and the thriving defense technology sector. By intertwining market analysis with deep dives into defense innovation, Yonatan Adiri and Michal Avram provide listeners with a comprehensive understanding of the factors shaping Israel's position on the global stage. The episode emphasizes resilience, strategic alliances, and the pivotal role of innovation in steering the Israeli economy towards a secure and prosperous future.

Notable Quotes:

• Yonatan Adiri [00:12]: "That's 5,000 acres... the largest fire we've seen in 15 years here in Israel."
• Michal Avram [00:36]: "My number is 11 million. That's $11 million for Israeli defense tech startup Kela's seed round..."
• Yonatan Adiri [09:19]: "We've bought 14 airplanes. There's a national hierarchy, trainings, processes..."
• Yonatan Adiri [17:47]: "We need to expand and broaden its strategic relationships with countries... Germany and India."
• Michal Avram [34:06]: "Palantir CEO Alex Karp... was responding to... accusing him and his company of using AI to kill Palestinians."
• Yonatan Adiri [35:11]: "If you can defend your position, you shouldn't be shy."

Produced by: Ilan Benatar
Edited by: Michal Lev-Ram
Sound and Video Editing: Martin Juergo
Theme Music: Midnight Generation

This podcast provides general business and economic insights and should not be considered comprehensive for investment decisions. It does not recommend or solicit any investment strategies or securities.