Jerusalem, 4 June, 2026 (TPS-IL) — Israeli businesses are rapidly increasing their use of artificial intelligence, with nearly four in ten companies expecting to adopt the technology within six months, up from roughly one in four a year earlier.
The figures, released by the Central Bureau of Statistics on Thursday, suggest Israel is among the world’s quicker adopters of workplace AI, as governments and businesses continue grappling with how to measure and regulate the technology’s spread.
One of the most notable developments was the sharp rise in adoption across traditional manufacturing industries. Companies in manufacturing, electricity, and water supply—sectors not typically viewed as early technology adopters—recorded significant increases in AI use between June 2025 and March 2026. Usage for administrative and business processes rose from about 14 percent to 52 percent, while marketing and sales applications climbed from roughly 16 percent to 57 percent.
Among companies already Using AI, the most common application is administrative and business processes, including planning and recruitment, cited by about 63 percent of AI-using firms. In service-sector companies outside the high-tech industry, that figure rises to 69 percent. Marketing and sales ranks second, used by roughly 46 percent of AI-adopting businesses, while around 35 percent report using AI for product development or direct customer service, and a similar share for research and innovation.
The high-tech and financial sectors remain well ahead of the broader economy. About 73 percent of firms in these industries use AI for research and development, compared to 35 percent across all industries. Half also report using AI for product manufacturing or service delivery to customers.
A panel analysis tracking more than 800 businesses across both survey periods found that companies using AI for longer were more likely to report significant gains in worker productivity. At the same time, more mature AI users were also more likely to report reductions in employment levels, suggesting that deeper integration of the technology may be associated with workforce changes as well as efficiency gains.
On barriers to adoption, about 76 percent of businesses not currently using AI said the technology was not relevant to their economic activity, a figure largely unchanged from June 2025. However, the share citing a lack of knowledge about AI capabilities nearly doubled, rising from around 8 percent to 16 percent, suggesting that limited understanding of the technology is becoming a more significant obstacle to adoption as it becomes more widespread.
In the high-tech and financial sectors, the share of non-adopters who viewed AI as irrelevant to their business fell sharply, from 78 percent in June 2025 to 39 percent in March 2026, suggesting that even firms that have not yet implemented AI increasingly see the technology as relevant to their future operations.
The findings were based on a survey of businesses with ten or more employees — some 36,551 companies — conducted in March 2026 as part of Israel’s monthly Business Tendency Survey, which tracks business activity and expectations. The report builds on earlier findings from June 2025 and is intended to allow international comparison of AI adoption trends across economies.——————
Israeli businesses are adopting artificial intelligence at a notably faster pace than a year ago, with nearly four in ten companies now anticipating they will use the technology within the next six months — up from roughly one in four in June 2025.
The figures place Israel among the faster-moving economies on AI workplace adoption, at a moment when governments worldwide are still debating how to measure — let alone manage — the technology’s spread.
The Central Bureau of Statistics’ findings findings come from a survey of businesses with ten or more employees, a population of some 36,551 companies, conducted in March 2026 as part of Israel’s monthly Business Tendency Survey. The report is a follow-up to an earlier release from April 2026 and is designed in part to allow international comparisons with other economies tracking AI adoption.
Among companies already using AI, the most common application by far is administrative and business processes — including strategic planning and recruitment — cited by about 63 percent of AI-using firms. In service-sector companies outside the high-tech industry, that figure rises to 69 percent. Marketing and sales came second, used by roughly 46 percent of AI-adopting businesses, while around 35 percent reported using the technology for product development or direct customer service, and a similar share for research and innovation.
The high-tech and financial sectors, unsurprisingly, stand apart. About 73 percent of those firms use AI for research and development — a gap of 38 percentage points above the economy-wide average, wider than the 28-point gap recorded in June 2025, suggesting the sector is pulling further ahead. Half of high-tech and financial companies also use AI for product manufacturing or service delivery to customers, compared to 35 percent across all industries.
One of the report’s more striking findings concerns Israel’s traditional manufacturing sector. Companies in industry, electricity, and water supply — generally not seen as early technology adopters — showed dramatic increases in AI use across several categories between June 2025 and March 2026. Usage for administrative and business processes jumped from roughly 14 percent to 52 percent, while marketing and sales applications rose from about 16 percent to 57 percent.
Longer-term users of AI appear to be integrating it more deeply. A panel analysis tracking more than 800 businesses across both survey periods found that companies using AI for longer were more likely to report significant gains in worker productivity. However, the same experienced users were also more likely to report negative effects on employment levels — suggesting that as AI matures within a business, it begins to displace roles rather than simply augment them.
On barriers to adoption, about 76 percent of businesses not currently using AI said the technology was simply not relevant to their economic activity, a figure nearly unchanged from June 2025. However, the share citing a lack of knowledge about AI capabilities nearly doubled, rising from around 8 percent to 16 percent — a signal that awareness, not just perceived relevance, is becoming a meaningful obstacle as the technology becomes more visible.
In the high-tech and financial sectors, the proportion of non-adopters who said AI was irrelevant to their business fell sharply, from 78 percent in June 2025 to just 39 percent in March 2026, pointing to a significant shift in how even hesitant firms in those industries now perceive the technology’s potential.