Israeli businesses are rapidly increasing their use of artificial intelligence, with nearly four in 10 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% to 52%, while marketing and sales applications climbed from roughly 16% to 57%.
Among companies already using AI, the most common application is administrative and business processes, including planning and recruitment, cited by about 63% of AI-using firms. In service-sector companies outside the high-tech industry, that figure rises to 69%. Marketing and sales ranks second, used by roughly 46% of AI-adopting businesses, while around 35% 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% of firms in these industries use AI for research and development, compared to 35% 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% 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% to 16%, 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% in June 2025 to 39% 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 10 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.
