Israel’s defense relationship with the United States is undergoing its most significant shift in decades, moving beyond the familiar rhythm of 10‑year, multi‑billion‑dollar memorandums of understanding toward a deeper, more commercially driven partnership.
Instead of relying primarily on government‑to‑government aid frameworks, Israeli and American defense firms are increasingly designing, testing, and producing systems together. It’s the beginning of a transition from traditional assistance to a model built on joint innovation, shared industrial capacity, and long‑term strategic interdependence.
For nearly half a century, US-Israel defense ties were defined by large aid packages renewed every decade, most recently the $38‑billion MoU signed in 2016. That structure is now being reconsidered as both countries shift towards sovereign defense manufacturing.
American firms are partnering with Israeli companies on missile defense, unmanned systems, cyber capabilities, and battlefield AI, creating joint production lines and shared intellectual property.
Israel’s defense‑tech ecosystem has become one of the country’s most strategically important innovation engines, and it is attracting growing international interest. Dozens of Israeli companies are moving to the United States, opening up American headquarters in an attempt to push their way into the local defense market.
Several Israeli venture capital firms, such as Caveret Ventures and CET (Critical Emerging Technologies) Sandbox, have been holding defense-tech accelerators in the United States, in Texas, Washington, Michigan, and others.
Now, in addition to accelerators, Caveret Ventures will be opening up a defense-tech hub in Austin, Texas, to help defense tech companies succeed.
Caveret Ventures and Q-Branch are in the midst of building the first co-sharing assembly hub, purposely being constructed for frontier-tech, along with defense and dual-use companies. The center aims to solve the weak link in the commercialization of these sorts of technology – the inability to scale hardware.
The center is based on a membership-only model. Members receive their own private, dedicated facility space for their operations, along with access to shared industrial-grade machinery, testing infrastructure, integrated logistics, and compliant operations. They will also receive defense and industry mentorship, contract bidding and procurement support, professional services across legal, compliance, certification, and supply chain, along with demo days with decision-makers and technical validation by experts.
“The hub gives hardware companies the one thing they cannot buy anywhere else, the ability to scale without building a factory, and the ability to compete in the US defense and frontier‑tech landscape from day one,” read a white paper seen by the Report.
Accelerating into the US
The announcement comes shortly after half a dozen Israeli companies participated in a week-long accelerator led by Caveret Ventures and Q-Branch aimed at fast-tracking their entry into the US defense market.
Participating companies in the second cohort of the accelerator program included Black Rover, SkyPulse Technologies, CopterPIX Pro, SkySapience, and Eagle X, alongside US participant Future Optek. Their technologies range from autonomous aerial defense systems and tethered UAS platforms to mixed‑reality optics and visual‑intelligence tools.
“It [doesn’t] matter if you [are in business] 30 years or 20 years or a new start-up. When you go to other places, you really need this guidance and this help, and I think [Q-Branch gives] you a better understanding of the market and, of course, a soft landing in the new country,” said Shaked Mor Yosef, of Eagle X.
Participants received hands-on guidance in navigating American procurement processes, regulatory and compliance frameworks, and adapting products to US operational standards, including pathways toward local manufacturing and scale‑up. They also met with state officials, innovation organizations, and US defense stakeholders.
The program concluded with an operational test day at the Texas A&M RELLIS campus, where participating companies conducted live evaluations of their systems. The event drew interest from US military observers, federal agencies, and industry partners.
Caveret’s leadership, including CEO Joseph Yaker and Marcus Cervantes, took part in the program. Yaker told the Report that, unlike in Israel, the local defense market is open only to companies that are invited in.
“The US market doesn’t open to those who push hardest; it opens to those who earn the right to be invited. Through the Israel-to-Texas corridor we’ve built with Q-Branch, Israeli companies aren’t just entering a market. They’re anchoring into it, backed by the right relationships, with Israeli ingenuity placed exactly where it belongs, at the heart of it. That’s what this cohort is all about,” Yaker said.
Cervantes, a Texas native, came to Israel before the month-long war with Iran and met with the participants.
“Before the war start[ed], Mark came to Israel, met us face to face, [saw] … our actual needs, [to] understand the product even better. Because I strongly believe that when you understand the product better, you communicate it better with other companies in the ecosystem,” Oz Ganor of SkyPulse told the Report.
Cervantes was impressed with them, saying “they refused to stop” even when the war broke out just days before the cohort began.
“These founders kept refining, kept testing, kept showing up through air-raid alarms. I’ve spent my career around resilient people, and I’ve rarely seen anything like it,” he said, adding that “our work is to honor that grit by giving their technology a real path forward, into American industry and into the hands of the operators who need it. Courage like theirs deserves more than admiration. It deserves a partner willing to build alongside them. That’s what Q-Branch is here to do.”
A new relationship
The moves by Caveret and other defense tech firms come as the United States and Israel have finally begun talks on a new, possibly the last, MoU.
The last was signed in 2016 and established a 10‑year framework for American security assistance to Israel covering fiscal years 2019 through 2028. The agreement committed the US to providing $38b. in total support, including $33b. in Foreign Military Financing (FMF) and another $5b.for joint missile‑defense programs such as Iron Dome, David’s Sling, and the Arrow systems.
It replaced the previous 2009-2018 MoU and formalized multi‑year funding levels intended to maintain Israel’s qualitative military edge (QME) and support ongoing defense cooperation.
The 2016 MoU, the largest military assistance package ever agreed to by the United States, may also be the last built around the traditional model of fixed, decade-long aid, as the two countries shift toward co-production and joint technology development.
Since then, the bilateral defense cooperation has expanded into joint development and manufacturing of systems such as missile‑defense interceptors and precision‑guided munitions, alongside new programs in areas including air‑defense lasers, autonomous platforms, and advanced sensors.
As the partnership evolves, the focus is shifting from traditional aid frameworks toward joint development, shared manufacturing, and deeper industrial integration.
For companies like Caveret and CET, along with the start-ups moving through its programs, it’s the practical route into this growing market. And as Washington demands more domestic production and faster fielding cycles, Israeli defense‑tech companies that anchor themselves inside the American industrial base will be the ones shaping a possible next phase of the alliance.■