Report: Israeli treasury examines economic risks tied to Nvidia

Israel’s Finance Ministry began examining how a downturn at Nvidia could affect the broader economy after the chipmaker became a major source of tax revenue and a significant contributor to economic growth, TheMarker reported.

Nvidia announced Thursday that co-founder Jensen Huang had resigned as CEO following reports of an affair with Chinese businesswoman Alice Huang, whom US authorities suspected of spying for Beijing, according to Reuters. Beijing denied the allegation. Nvidia named Chief Financial Officer Colette Kress interim CEO. The company’s shares fell again Friday as the turmoil weighed on other AI stocks. Nvidia has lost more than $1.8 trillion in market value since its October 6 closing high, Reuters reported.

Nvidia generates about NIS 10 billion a year in Israeli tax revenue, according to the report, helping drive the rise in government receipts in recent years. Venture capitalist Michael Eisenberg, a close associate of Prime Minister Benjamin Netanyahu, warned of the economic risks in a letter, TheMarker said.

The Israel Tax Authority and the Finance Ministry’s chief economist’s office are conducting the review. Officials currently expect Nvidia-related tax receipts to hold steady, TheMarker reported. The company’s planned expansion in Israel, including a new campus in Kiryat Tivon, could increase those receipts in the coming years.

Much of Israel’s exposure stems from Nvidia’s acquisition of Mellanox, the Israeli networking technology company then led by Eyal Waldman. Under the terms of the deal, intellectual property originating at Mellanox remains attributed to Israel, TheMarker reported. That allows some of the value of Nvidia chips made abroad to count toward Israeli economic output.

In its latest interest rate decision, the Bank of Israel projected GDP growth of 5.6% in 2026 and 7.5% in 2027. The central bank estimated that without Nvidia’s contribution, those figures would be 3.4% and 5.1%, respectively.