Intel is undoubtedly Nvidia's main supplier of new employees in Israel, and for good reason. The former chip giant, whose best days are behind it, employs some 4,000 hardware and software engineers in Israel, many of them in areas dear to Nvidia's core: core chip development, communications and hardware testing.
"Globes" has found that over 100 former Intel employees have started working at Nvidia in the last three months alone, half of whom left Intel very recently. Intel is currently continuing to lay off development and production workers as part of new CEO Lip Bu-Tan's streamlining plan to transform Intel into a lean and efficient company that can produce chips for rivals as well. This is perfect timing for Nvidia, which in Israel has opened up hundreds of new positons and has grown here by a thousand employees a year.
Judging by Nvidia's move at the beginning of the week, it seems that the company is on its way to further eclipse Intel, at least in Israel. If Nvidia's plans are fully realized and a 180,000-square-meter campus is built in northern Israel, it will eventually capture from Intel the title of the largest privately-held tech company in Israel, although this could take five years to happen, providing it does not lose its monopolistic status.
Classic underdog story
It's a classic underdog story. Nvidia, founded in 1993, when Intel was at its peak, was considered the poor relation - an insignificant company developing a graphics processor for video games. Intel ignored it, then tried to compete with it with its own graphics processor, but Jensen Huang, Nvidia's founder and CEO believed that the processing capabilities of the graphics chip would be suitable for supercomputing and then for AI. The gamble paid off and the rest is history: Nvidia is close to crossing the $4 trillion market cap mark, while Intel has been below the $100 billion market cap threshold for the past year.
And yet: Who contributes more to Israel, and what is better for its economic indicators? There is no doubt that an addition of 5,000 employees, which is of course contingent on Nvidia's recruitment plans and its continued success, will add billions of shekels to the Israeli economy as a result of income tax on salaries, but a substantial portion of Nvidia employees' salaries are paid in shares. Therefore, an Nvidia employee who receives blocked shares (under Section 102) will pay capital gains tax on the realization of shares at a profit, and not income tax - a lower tax rate on their salary packages.
In addition, the contribution of a manufacturing plant to the country is infinitely greater than that of a development center - even if both are located in Priority A industrial zones. A foreign company's development center pays taxes using the "cost plus" method, which is considered low for state revenues, while a manufacturing plant like Intel's exports goods and boosts the trade balance. Intel was Israel's leading exporter in 2023, overtaking Elbit, Israel Aerospace Industries, Rafael, and Amdocs, with exports of NIS 29 billion. According to a report it released last year, it is responsible for between 3.5% and 5.5% of Israeli exports annually. Local procurement invested in contractors and raw materials was worth $3 billion in 2023, and construction investments stood at $2 billion per year.
At a conference held by Intel last April, Intel's CEO defined the manufacturing plant in Kiryat Gat as the company's leader in the field of 7 and 10 nanometer technologies, and as responsible for implementing AI in all plants. The new Fab 38 plant was recently equipped with production machines that can also manufacture more advanced chips, up to 14 angstroms. There is no doubt that Nvidia is growing, while Intel is crashing - but the Israeli economy continues to benefit more, even today, from the company in distress, rather than from the growing company.
Published by Globes, Israel business news - en.globes.co.il - on July 7, 2025.
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