Israel and Mossad Have a Deep Foothold Inside the US Military Complex

Israeli defense companies are building an increasingly institutionalized position inside the U.S. military-industrial base, combining direct ownership of American subsidiaries with joint ventures, technology licensing, co-production and acquisition of U.S.-facing defense businesses.

The footprint remains considerably smaller than that of the largest American defense contractors.

However, companies including Elbit Systems, Rafael Advanced Defense Systems and Israel Aerospace Industries now operate through U.S. structures that connect Israeli-origin technology directly to Pentagon procurement, classified programs and domestic manufacturing.

A new legislative push could deepen those links further.

Congress Builds a Formal Technology Pipeline

Provisions in the fiscal 2027 National Defense Authorization Act direct the U.S. defense secretary to establish a U.S.-Israel Defense Technology Cooperation Initiative.

The measure, originating in the bipartisan U.S.-Israel FUTURES Act, gives particular attention to “jointly developed or Israeli-origin technologies” that could be incorporated into U.S. systems and formal programs of record.

It is designed to shorten the route from technology identification to military procurement while promoting licensing, joint ventures and U.S.-based manufacturing involving Israeli industry.

Counter-drone systems, missile and air defense, artificial intelligence, autonomous platforms, directed energy and cyber capabilities are among the areas covered.

Parallel intelligence authorization provisions would expand information sharing. Together, the measures add another layer to existing Foreign Military Financing, Foreign Military Sales and cooperative defense programs.

Elbit Builds a Large American Subsidiary

Elbit Systems of America is one of the clearest examples of direct Israeli corporate ownership inside the U.S. defense market.

The company is wholly owned by Israel-based Elbit Systems Ltd, while operating in the U.S. under a Special Security Agreement with the Department of Defense.

That structure permits classified work while imposing U.S.-citizen governance requirements.

Elbit Systems of America employs more than 3,500 people at U.S. facilities including sites in Fort Worth, Charleston and Roanoke.

Its position spans soldier systems, night vision, border technology, and undersea warfare.

The company has secured work including a roughly $120mn U.S. Army Soldier-Borne Mission Command contract and Customs and Border Protection awards exceeding $370mn through 2029.

Its acquisition of Sparton expanded its exposure to undersea systems.

Elbit has also partnered with Anduril on a bid for next-generation U.S. self-propelled artillery, emphasizing domestic production and American content.

In aircraft systems, its U.S. presence also reaches joint ventures involving helmet-mounted displays with Collins Aerospace, part of RTX, including systems connected to the F-35 and other platforms.

Ondas, Mossad and an Israeli Defense Portfolio

Ondas Holdings is emerging as another model of integration. Unlike the major Israeli state-owned groups, Ondas is a Nasdaq-listed U.S. company.

It has, however, assembled a growing portfolio of Israeli defense technology businesses through acquisitions.

These include Airobotics, Sentrycs, Omnisys, Apeiro Motion and 4M Defense, along with Aran's recently acquired defense activities.

Its leadership structure has also moved closer to Israel's defense establishment.

In August 2026, Ondas appointed former Mossad director David Barnea, who led the agency from 2021 to 2026, as Global President and Chairman of its Ondas Defense unit.

Other senior Israeli defense figures subsequently joined the organization.

The company is building an AI-enabled autonomous systems portfolio aimed at U.S. and allied defense markets.

The structure differs from Elbit, Rafael or IAI: rather than an Israeli parent establishing an American subsidiary, a U.S.-listed company is consolidating multiple Israeli-origin defense technologies under one corporate platform.

Rafael Uses Joint Ventures to Enter US Production

Rafael Advanced Defense Systems has pursued a different combination of subsidiaries, acquisitions and partnerships.

The Israeli state-owned group operates through Rafael USA and other entities including Rafael Systems Global Sustainment, C4 Advanced Tactical Systems and PVP Advanced EO Systems.

Its joint ventures provide some of its most direct links into U.S. manufacturing.

Raytheon-Rafael Area Protection Systems, or R2S, brings Rafael together with RTX's Raytheon business to produce Iron Dome-related Tamir and SkyHunter interceptors in the U.S.

Production is tied to an Arkansas facility and recent large contracts.

Rafael has also formed Prometheus Energetics with Kratos Defense, a 50-50 venture intended to manufacture solid-rocket motors and energetic materials in Indiana for U.S. demand from around 2027.

Other Rafael technologies have moved through American evaluation or integration channels.

Trophy active protection systems and SPIKE missiles have been adapted or assessed for U.S. applications, while Rafael has worked with Lockheed Martin on high-energy laser technology derived from its Iron Beam program.

IAI Operates Through an Americanized Supply Chain

Israel Aerospace Industries has established its U.S. presence through IAI North America and subsidiaries including Stark Aerospace in Mississippi and ELTA North America.

The Israeli state-owned company uses those entities to offer systems through American production and supply-chain structures, including UAVs, payloads, radar and electronic systems.

Stark Aerospace has historically worked on UAV-related programs including Hunter upgrades. ELTA North America provides another U.S.-based route for Israeli-origin radar and electronics technology.

IAI says its American operations draw on hundreds of U.S. suppliers.

Its industrial relationships also extend to major primes. Boeing has participated in work involving Arrow subsystems and the F-15, while Lockheed Martin has been linked to F-35 wing and component production as well as discussions surrounding potential Arrow 4 production.

Both IAI and Rafael have also explored possible U.S. listings.

MDT Armor Links Alabama Production to Israeli Requirements

MDT Armor represents a smaller but direct ownership structure. The Alabama-based business is owned by Israeli armored vehicle manufacturer Shladot and produces the David and Tiger lightweight armored vehicles.

U.S. Army Foreign Military Sales contracts have financed U.S.-manufactured vehicles for delivery to Israel.

Recent contract examples include awards of about $10mn, $22mn, and $15.4mn, while reported cumulative deliveries have exceeded 1,000 vehicles.

The arrangement illustrates how Israeli corporate ownership, American production and U.S.-funded military sales can operate within the same procurement chain.

American Primes Remain Central

Israeli ownership is only one part of the relationship.

Lockheed Martin, RTX, Boeing, Northrop Grumman, General Dynamics, L3Harris and Oshkosh are not Israeli-controlled companies.

Their links with Israeli industry instead center on joint research, licensed technology, co-production, integration and military sales.

Iron Dome production, Trophy integration, F-35 and F-15 components and vehicle or ammunition programs sit within that broader structure.

Policy is Moving Toward Faster Integration

Smaller Israeli-linked businesses are attempting to use the same pathways.

U.S.-incorporated drone companies with Israeli founders or technologies, Israeli defense start-ups seeking Pentagon contracts and companies pursuing American manufacturing footprints have added another layer to the market.

Some have attracted capital from U.S. investors, including Sequoia and In-Q-Tel. Israeli companies such as Bet Shemesh Engines have also announced U.S. production partnerships aimed at military customers.

The underlying structure has developed through decades of bilateral security programs, military financing, technology transfers and reciprocal industrial participation.

What is changing is the degree to which that integration could become an explicit procurement objective.

The fiscal 2027 NDAA provisions would create a more formal mechanism for moving Israeli-origin technologies into U.S. systems, production facilities and programs of record.

For Israeli defense companies already operating through American subsidiaries and partnerships, that could turn an established industrial presence into a faster and more systematic route into the U.S. military market.