Israel’s war in Gaza, which erupted in October 2023, has become one of the most profitable conflicts for major US defense contractors.
As Gaza was being devastated and hundreds of thousands of civilians faced death and starvation, weapons factories across several US states were running at full capacity to meet Israel’s expanding military demands, generating more than 32 billion dollars in sales in just two years, according to a Wall Street Journal analysis based on US State Department data.
After the Hamas attack on southern Israel on October 7, 2023, and the large-scale Israeli military campaign that followed, Washington moved quickly to open an unprecedented weapons pipeline that included precision-guided munitions, long-range missiles, fighter jets and field equipment.
While Israel typically receives around 3.3 billion dollars in annual military assistance, that figure doubled in 2024 to 6.8 billion dollars in direct funding, not including non-cash support such as logistics, training and intelligence coordination.
A US State Department spokesperson said the Trump administration remains committed to Israel’s right to defend itself, adding that Washington is currently leading a regional effort to end the war through lasting security arrangements.
But despite talk of a “possible end” to the conflict, Pentagon data show that weapons production lines in US factories have not slowed and that supply contracts run through 2029, meaning arms deliveries to Israel will continue even after the fighting stops.
Who is benefiting most?
Boeing sits at the top of the list of beneficiaries after securing a 18.8 billion dollar deal to sell upgraded F-15 fighter jets to Israel, with delivery expected in four years.
The company also won an additional 7.9 billion dollars in contracts to supply Tel Aviv with guided bombs and associated weapons systems. These deals alone represent a major leap compared with Israel’s previous commitments to Boeing, which totaled less than 10 billion dollars over an entire decade.
Northrop Grumman, Lockheed Martin and General Dynamics secured specialized contracts for fighter jet spare parts, precision missiles and 120-millimeter tank rounds used in Merkava tanks.
Caterpillar benefited from soaring demand for its armored D9 bulldozers, widely deployed by the Israeli military to destroy homes and infrastructure in the enclave.
According to the US Defense Security Cooperation Agency, most of the deals are concentrated in aerial munitions and attack aircraft, while ground systems such as tanks and armored vehicles represent a far smaller share of total sales.
War as an economic opportunity
The conflict has not only been a military campaign, it also served as an economic boost for the US defense sector, which in recent years struggled with supply chain disruptions and labor strikes.
Boeing said in its 2024 annual report that its defense division saw strong demand from governments prioritizing security and defense technology amid rising threats.
Lockheed Martin reported a 13 percent increase in missile division revenues, reaching 12.7 billion dollars in a single year.
Oshkosh, which produces tactical military vehicles, said Israel’s orders saved a production line that was close to shutting down last year. Italy’s Leonardo Group, whose US unit sells military trailers to Israel, said in its latest financial report that the continuation of the conflicts in Ukraine and Israel ensures stable international sales for 2025.
The cost of war and who pays the price
Although the billions flowing through arms deals reflect a boom for the US defense industry, the humanitarian and political dimensions of the conflict have fueled debate in the United States and abroad.
The war has killed more than 68,000 people, including about 18,000 children, according to the Gaza Health Ministry. Israel has not released any official figures on the number of Hamas fighters killed.
As Washington funds a significant share of these sales with US taxpayer money, some Western financial institutions have started taking protest measures.
Three Norwegian funds withdrew investments from companies such as Caterpillar, Oshkosh and Palantir over the use of their products in Gaza. The Dutch pension fund sold its 448 million dollar stake in Caterpillar for the same reasons.
In Europe, Germany announced in August 2025 a halt to all arms export licenses to Israel for use in Gaza. US technology companies also faced internal pressure, prompting Microsoft to restrict the Israeli Defense Ministry’s access to some of its cloud services.
Artificial intelligence on the battlefield
Alongside conventional weapons, the war created a wider arena for cooperation on artificial intelligence and digital surveillance. Palantir, owned by conservative billionaire Peter Thiel, entered a partnership with the Israeli Defense Ministry in early 2024. After criticism that its tools were being used in airstrikes, CEO Alex Karp responded by saying that most of those killed “were terrorists,” in his words.
Israel also signed pre-war agreements with Google, Amazon and Microsoft for advanced cloud computing services, and all three companies have faced growing employee protests calling for an end to military cooperation.
In an unusual twist, some of the same US firms supplying Israel with weapons also participate in humanitarian relief programs for Gaza.
The US State Department allocated 30 million dollars to the Gaza Humanitarian Foundation, overseen by former Trump adviser Johnnie Moore, to coordinate aid distribution in the enclave.
The foundation hired American security contractors to protect its operations amid chaos and allegations of poor organization.
