Cyber Report 2025

In recent years, artificial intelligence has rapidly become a foundational element in cybersecurity, altering both the threat landscape and the ways organizations protect themselves.

Ever since AI capabilities began to mature, attackers have leveraged AI tools to automate, scale, and personalize cyberattacks, lowering the barrier to entry for malicious actors and increasing the sophistication of threats. At the same time, defenders have responded with a new generation of AI-driven security solutions, capable of detecting subtle anomalies, automating threat responses, and protecting critical, foundational AI assets. This evolutionary pattern is evident in Israel, where a vibrant ecosystem of nearly 450 cybersecurity startups, over 100 of which are focused on AI, has positioned the country as a global leader in AI-Cyber innovation.

Israel has already played a pivotal role in two previous cybersecurity waves: network security in the early 2000s and cloud-native security in the late 2010s. In both cases, tight feedback loops between the local defense sector, academic research and venture capital produced outsized outcomes, both in terms of category-defining companies and global funding share.

The AI-Cyber segment is emerging under similar conditions. Over the past three years, investment in Israeli AI-Cyber companies has surged, with the share of funding for these firms nearly doubling, reflecting a growing consensus that AI-powered solutions are essential for staying ahead of adversaries. This influx of capital has fueled rapid innovation, as startups and established players race to develop tools that address both the opportunities and risks presented by AI. As a result, the market is witnessing a shift from AI as a peripheral feature to AI as the core of security offerings, and from traditional roles and responsibilities to new organizational structures that can better manage AI-related risks.

Within this rapidly evolving ecosystem, Israeli AI-Cyber companies are increasingly differentiated by their strategic focus and technological approach. Some firms are pioneering AI-driven tools that enhance traditional cybersecurity functions, such as threat detection, incident response, and vulnerability management, by leveraging advanced analytics and automation. Others are addressing the unique risks introduced by AI itself, developing solutions that safeguard the integrity, security, and compliance of AI models, data pipelines, and machine learning operations. This segmentation reflects a maturing market, where companies are not only using AI to strengthen cyber defenses but are also innovating to protect the AI technologies that now underpin critical business operations.

Several forces are accelerating the transformation of the Cyber landscape. Market demand and investor enthusiasm are driving organizations to adopt AI at scale, while the threat landscape continues to evolve as AI lowers the barrier for attackers and amplifies the impact of cyber incidents. Regulatory scrutiny is intensifying, compelling organizations to demonstrate robust oversight of AI-driven processes and data. These pressures are reshaping the internal structure of security teams, prompting the emergence of new roles, responsibilities, and workflows. Security leaders are increasingly challenged by visibility gaps and unknown risks, leading to a shift toward more automated, intelligence-driven operations and the development of specialized solutions for safeguarding AI models, data pipelines, and supply chains.

As a result, the cybersecurity sector is experiencing both consolidation and diversification, with established players and startups alike racing to define the next generation of security platforms. The integration of AI is no longer a feature but a foundational element, influencing everything from product architecture to organizational strategy. Israel’s experience demonstrates how agility, innovation, and a proactive approach to emerging risks can set new standards for cybersecurity in the AI era. As the global landscape continues to evolve, the lessons from Israel’s AI-Cyber ecosystem offer valuable insights for organizations and policymakers seeking to harness the benefits of AI while effectively managing its risks.

This report is a joint effort led by Deloitte Catalyst, Glilot Capital Partners, AI21 Labs and Herzog designed to examine and illustrate the transformation of the cybersecurity sector and the growing AI-Cyber landscape and illustrates the evolving product landscape. The report leverages expert interviews, an analysis of market developments and a dedicated survey conducted by Glilot Capital Partners among its international network of CISO Advisors to provide insights into the tectonic shifts that reshaping Cybersecurity and the role Israel plays.

AI is no longer a spark of innovation, it’s a force reshaping cybersecurity with relentless momentum. From startups crafting cutting-edge defenses powered by advanced language models to pioneers safeguarding AI systems from emerging threats, Israel stands as a global beacon of innovation. Our exclusive CISO survey captures the pulse of this shift: 96% of cybersecurity leaders see AI driving groundbreaking product innovation, and 75% affirm its profound impact on the solutions that protect our digital world.

This report is more than a snapshot—it’s a guide to understanding and navigating the AI-cyber frontier. Our goal is twofold: to map the dynamic ecosystem of Israel’s AI-driven cybersecurity companies, detailing their growth, investment trends, and unique subsegments, and to deliver an evidence-based outlook on how market and technological forces are shaping this landscape. Through vivid data, expert interviews with founders, investors, and security leaders, and a comprehensive ecosystem map, we uncover the blueprint for thriving in a new era of cybersecurity.

israel’s evolving AI-cyber ecosystem

Israel’s Cyber Startup Hub

450

active cybersecurity startups

100

AI-Cyber companies

22%

of the national ecosystem (mid-2025)

AI-Cyber drives new growth

Over 40%

of new Israeli cybersecurity startups (2022-2024) focus on AI, signaling rapid sector expansion

Resilient AI-Cyber Investment

AI-Cyber funding grew to over $1.5B in 2024 (~60% of sector total), growing rapidly despite broader funding decline.

M&A Leadership

$1.6B

of $2.8B deal volume

AI-Cyber firms led industry consolidation, driving half of all Israeli cybersecurity M&A deals and $1.6B of $2.8B deal volume since 2024.

THE ECOSYSTEM MAP

AI for Cyber

GenAI-Enabled Security Operations

GenAI Workflow Automation and SecOps

GenAI-Enabled DevSecOps

GenAI-Enabled Security Solutions

AI-Enhanced
Fraud Detection

AI-Powered Risk &
Vulnerability Management

Autonomous Threat
Detection & Response

Data Security &
Privacy Automation

Cyber for AI

GenAI Security

AI Asset & Posture Management

AI Asset Security

Trust, Verification and Misuse Prevention

Force 1

A strong market push for the adoption of  AI-Cyber solutions

Force 2

A rapidly evolving threat landscape fueled by accessible intelligence

Force 3

Heightened regulatory scrutiny in a high-stakes environment;

Force 4

The transformation of enterprise structures through AI-powered tools

Transformation 1

The Widening  CISO Blind-Spot

Transformation 2

The New  CISO Office

Transformation 3

AI Driven Security Solutions — From Edge Features to Native Products

Transformation 4

AI Security – Defending the  New Crown Jewels

Transformation 5

Consolidation and the Platform Question

Highlights from Glilot CISO Survey

As defined thereafter

96%
of CISOs agree that AI accelerates cybersecurity innovation
75%
of CISOs agree that AI reshapes threat prevention tools
over 50%
of CISOs say that AI is now mission-critical in solution selection
71%
of CISOs say that AI is transforming security team operations
73%
of CISOs believe that Israel leads globally in AI-powered  cybersecurity startups

Israel’s AI-Cyber Frontier:

Navigating the Future of Cybersecurity

EXECUTIVE SUMMARY