Elbit Systems
Based on Wikipedia: Elbit Systems
In the fluorescent-lit offices of pension funds across Scandinavia, investment committees have spent the last fifteen years making an unusual decision: whether owning stock in a particular Israeli company makes them complicit in violations of international law. The company in question, Elbit Systems, has become one of the most controversial defense contractors on Earth—not because of what it makes, but because of where and how its products are used.
This is a company that supplies eighty-five percent of the drones flown by the Israeli Air Force and eighty-five percent of the land-based equipment used by the Israel Defense Forces. When Israel conducts military operations in Gaza or the West Bank, Elbit's technology is almost certainly involved. The company doesn't shy away from this fact. It advertises that its equipment has been "battle-tested" by the IDF in precisely these operations.
But Elbit is also a global company with twenty thousand employees, subsidiaries stretching from Sweden to the Philippines, and shares trading on both the Tel Aviv Stock Exchange and Nasdaq in New York. This dual identity—local Israeli military supplier and international defense contractor—has made it a lightning rod for activists and a test case for ethical investment policies worldwide.
From Minicomputers to Military Dominance
Elbit's origins lie in the optimistic technological moment of the mid-1960s, when Israel was building both its military capabilities and its computing industry from scratch. In 1966, a company called Elron Electronic Industries partnered with Israel's Ministry of Defense to create Elbit Computers Ltd. Their first product was the Elbit 100, a minicomputer—a term that sounds quaint now but represented cutting-edge technology at the time. Minicomputers were smaller than the room-sized mainframes that dominated corporate computing, making them practical for a much wider range of applications.
The Elbit 100 found success in civilian markets, attracting the attention of Control Data Corporation, an American computing giant. In 1970, Control Data paid the Israeli government one million dollars for its stake in the company and began marketing Elbit's computers worldwide. Throughout the 1970s, Elbit continued developing minicomputers, including a model called ANAT created in partnership with the German firm Nixdorf Computer.
The pivot came in the early 1980s. Israel was developing two ambitious military projects: the Lavi fighter jet and the Merkava tank. Elbit shifted its focus from civilian computing to defense electronics, developing systems and components for both programs. The company dropped "Computers" from its name, becoming simply Elbit Ltd., and Control Data sold its stake.
In 1996, a corporate restructuring split Elbit into three separate companies. Elbit Medical Imaging would focus on healthcare technology. Elbit Systems would handle defense electronics. And the original Elbit company would concentrate on communications, eventually leading the consortium that founded Partner Communications Company in 1999.
The Merger That Created a Giant
The year 2000 marked a transformative moment. Elbit Systems merged with El-Op, a company controlled by Michael Federmann, creating the largest non-governmental defense electronics company in Israel. Federmann became the dominant shareholder and remains chairman today.
What followed was a decade of aggressive expansion through acquisition. Elbit absorbed Elisra, picked up assets from Israel Military Industries' Aircraft Systems Division, and acquired Mikal Ltd. In 2018, Elbit completed its purchase of IMI Systems, the company formerly known as Israel Military Industries—a move that would later trigger divestment by the global bank HSBC.
The IMI acquisition illustrates the complex web of military manufacturing. IMI had produced cluster munitions, weapons that scatter explosive submunitions over a wide area and have been banned by more than one hundred countries under the 2008 Convention on Cluster Munitions. Israel never signed that convention, but HSBC had an ethics policy prohibiting investment in companies linked to cluster bomb manufacturing. When Elbit absorbed IMI, it absorbed this controversy too.
What Elbit Actually Makes
To understand why Elbit matters, you need to understand what it produces. The company's portfolio spans the alphabet soup of modern military technology: command, control, communications, intelligence, surveillance, and reconnaissance—often abbreviated as C4ISR in defense industry jargon.
Most notably, Elbit dominates Israel's unmanned aerial vehicle market. Drones, to use the common term, have transformed modern warfare. They allow militaries to conduct surveillance and strikes without putting pilots at risk. The Hermes 450, one of Elbit's flagship products, has been exported to militaries around the world.
In April 2024, a Hermes 450 was used in an airstrike that killed seven aid workers from World Central Kitchen, the humanitarian organization founded by chef José Andrés, as they traveled in a convoy in Gaza. The incident drew international condemnation and briefly focused global attention on the specific weapons systems being used in the conflict.
Beyond drones, Elbit produces electro-optics hardware—the cameras and sensors that allow military equipment to see in darkness and through obstacles. The company makes electronic warfare systems designed to jam enemy communications and protect friendly forces from similar attacks. It builds signal intelligence systems that intercept and analyze communications. And it manufactures the radios and networking equipment that allow military units to coordinate in the field.
One particularly revealing product is the Iron Fist active protection system, which Elbit won a contract to install on the IDF's Eitan armored fighting vehicle and its fleet of armored D9 bulldozers in 2019. Active protection systems detect incoming projectiles and destroy or deflect them before they hit the vehicle. The armored D9 bulldozer is a heavily modified Caterpillar tractor used for demolition operations, including the controversial practice of home demolitions in the occupied territories.
The Surveillance Wall
No single project has generated more controversy for Elbit than its involvement in Israel's West Bank barrier. This structure, which Israel began constructing in 2002, winds through the West Bank for approximately seven hundred kilometers. Israel describes it as a security barrier necessary to prevent terrorist attacks. Palestinians and many international observers call it an illegal land grab that cuts through Palestinian territory, separating farmers from their fields and communities from each other.
In 2004, the International Court of Justice issued an advisory opinion finding that the barrier's route through the West Bank violated international law. The court found that the barrier was not purely a security measure but served to facilitate Israeli settlement expansion in occupied territory.
Elbit supplies the surveillance systems that monitor the barrier—cameras, sensors, and monitoring equipment that turn the concrete and wire into an integrated security system. This specific involvement has made the company a target for divestment campaigns.
The first major institutional investor to divest was Norway's Government Pension Fund, one of the world's largest sovereign wealth funds, managing the country's oil revenues for future generations. In September 2009, the fund's ethical council recommended selling all shares in Elbit. At the press conference announcing the decision, Norway's Finance Minister Kristin Halvorsen said plainly: "We do not wish to fund companies that so directly contribute to violations of international humanitarian law."
Israel's Foreign Ministry summoned the Norwegian ambassador to protest.
The Divestment Cascade
Norway's decision opened the floodgates. In January 2010, Denmark's Danske Bank added Elbit to its list of companies failing its socially responsible investment policy. A bank spokesperson explained they were acting in their customers' interests by not "placing their money in companies that violate international standards." The following year, the Danish financial watchdog DanWatch added Elbit to its ethical blacklist.
A Swedish pension fund divested in March 2010, citing international treaty violations. In 2014, PKA Ltd., one of Denmark's largest pension fund administrators, announced it would no longer consider investing in Elbit, specifically citing the International Court of Justice's finding that the barrier violated Palestinian human rights.
The French insurance giant Axa partially divested in 2019 following years of pressure from the Boycott, Divestment, and Sanctions movement—known as BDS—which campaigns for economic pressure on Israel over its treatment of Palestinians. An April 2018 petition organized by SumOfUs gathered 140,000 signatures demanding Axa divest. The company "quietly reduced" its direct investments, though it remained indirectly invested through a non-controlling interest in a former subsidiary.
In 2025, both Allianz and Aviva terminated insurance contracts with Elbit's UK subsidiaries. Allianz stopped covering Elbit Systems UK, while Aviva ceased insuring UAV Engines, Elbit's drone engine manufacturer. These decisions followed years of protests and direct action by groups including Palestine Action, which had targeted Elbit facilities with occupations and demonstrations.
The Spyware Problem
Drones and surveillance walls are one kind of controversy. Spyware is another.
In December 2017, the Citizen Lab—a research group at the University of Toronto that investigates digital threats to civil society—published a disturbing report. Ethiopian dissidents and journalists living in the United States, the United Kingdom, and other countries had been targeted with sophisticated commercial spyware. The culprit: software sold and operated by Cyberbit, a wholly owned Elbit subsidiary.
The spyware could remotely monitor victims' computers, capturing keystrokes, recording audio and video through built-in cameras and microphones, and exfiltrating documents. Ethiopia's government, then under the increasingly authoritarian rule of the Ethiopian People's Revolutionary Democratic Front, appeared to be using Israeli technology to surveil its critics abroad.
Ronald Deibert, director of the Citizen Lab, said the findings "raised questions about the company's human rights due-diligence practices and processes for preventing misuse of its software." When Human Rights Watch contacted Cyberbit for comment, the company didn't deny selling such technology. Instead, it rejected responsibility for how customers might misuse it.
This pattern—selling powerful surveillance tools to governments with questionable human rights records, then claiming no responsibility for their use—has become depressingly common in the commercial spyware industry. Israel, home to companies like NSO Group (maker of the Pegasus spyware), has emerged as a global hub for this controversial trade.
Global Footprint, Local Resistance
Elbit's international expansion has made it a global target for protest. The company operates subsidiaries in Belgium, Brazil, Romania, France, Germany, Greece, Sweden, the United States, and elsewhere. Each location has become a potential site of controversy.
In the United Kingdom, Elbit facilities have faced sustained protest campaigns. Reporting in The Guardian revealed attempted coordination between Elbit, the Israeli Embassy, the Home Office, the Attorney General, and the Crown Prosecution Service regarding prosecution of Palestine Action activists, dating back to April 2022. By 2024, prosecutors were using powers under the Terrorism Act to detain activists without charges.
Germany has seen similar resistance. In 2025, Elbit Germany—which produces radio systems, night vision devices, and infrared countermeasures for the German military—faced a protest camp in April, banners hung on Ulm Minster in July, demonstrations in August demanding closure of Elbit's German locations, and a break-in with vandalism in September. The German operations grew from Elbit's purchase of the radio communication division of Telefunken, the storied German electronics company that helped develop radar and television.
Australia presents a different kind of problem. In April 2021, the Australian Army abruptly withdrew Elbit's battlefield management system from use, giving barely a month's notice. The Australian Broadcasting Corporation reported security concerns; the Australian Financial Review mentioned a "backdoor" security vulnerability uncovered by the Australian Signals Directorate, the country's signals intelligence agency. Elbit denied any security risks.
Yet remarkably, despite these concerns, Australia signed a six-hundred-million-dollar contract with Elbit in 2024. The defense industry, it seems, has a short memory—or perhaps limited alternatives.
The Azerbaijan Connection
Perhaps no international partnership illustrates the complexity of Elbit's global role better than its relationship with Azerbaijan.
Israel and Azerbaijan share something important: enemies. Azerbaijan, a majority-Muslim former Soviet republic on the Caspian Sea, has tense relations with Iran, its southern neighbor. Israel, of course, views Iran as an existential threat. This shared concern has made unlikely allies of the Jewish state and the Turkic republic.
Israel supplies Azerbaijan with advanced military equipment and helps train its army. Elbit opened an office in Baku, Azerbaijan's capital, in 2011, with plans to build a plant for joint production of unmanned aerial vehicles.
This partnership took on darker significance during the Nagorno-Karabakh conflict. Nagorno-Karabakh, a mountainous enclave internationally recognized as part of Azerbaijan but populated primarily by ethnic Armenians, had been controlled by Armenian forces since a war in the early 1990s. In 2020, Azerbaijan launched a military offensive that recaptured much of the territory. In 2023, a final offensive forced the remaining Armenian population to flee.
Reports in 2023 indicated that Elbit and other Israeli defense manufacturers had played an extensive role in discreetly arming Azerbaijan for these operations, which culminated in what many observers described as ethnic cleansing—the complete departure of a population that had lived in the region for centuries. Armenia has accused Azerbaijan of genocide.
The weapons that proved "battle-tested" in Gaza, in other words, found new applications in the Caucasus.
Watching the Watchers
In 2016, The Intercept published a remarkable story based on documents leaked by Edward Snowden. Starting in 2008, the United States' National Security Agency and Britain's Government Communications Headquarters (GCHQ) had been tapping into live feeds from Elbit drones as they were flown by the Israeli military against targets in Gaza, the West Bank, Syria, and Lebanon.
The implications were stunning. America and Britain, Israel's closest allies, were secretly monitoring Israeli military operations in real time. The surveillance apparently exploited vulnerabilities in the data links between drones and their operators—the same kind of security weakness that would later concern Australian intelligence officials.
The revelation offered a glimpse into the murky world of intelligence relationships, where even allies spy on each other, and where the same surveillance technologies used against enemies can be turned inward.
The Japanese Withdrawal
Not all of Elbit's international partnerships have survived contact with geopolitics. In March 2023, Elbit entered a strategic partnership with Itochu Aviation and Nippon Aircraft Supply, major Japanese trading and aviation companies. Less than a year later, in February 2024, Itochu ended the partnership.
The timing was significant. In January 2024, the International Court of Justice had issued provisional orders in South Africa's case against Israel, which alleged genocide in Gaza. Japan's foreign ministry, apparently concerned about association with companies supplying the Israeli military during this moment of international legal scrutiny, advised Itochu to end the relationship.
Japan, with its pacifist constitution and careful international image, was unwilling to maintain even an indirect connection to the Gaza conflict.
The Shape of Modern Warfare
Understanding Elbit means understanding how warfare has changed. The conflicts of the twenty-first century are increasingly defined by asymmetry: powerful states with advanced technology facing non-state actors or weaker opponents. Drones, surveillance systems, and precision weapons give technologically superior forces the ability to strike from a distance, with minimal risk to their own personnel.
Elbit's products are designed precisely for this kind of conflict. A Hermes drone can loiter over a target area for hours, its operators sitting in air-conditioned rooms far from danger. Electro-optical systems can identify individuals from kilometers away. Electronic warfare systems can blind enemy communications while keeping friendly networks functioning.
This technology raises profound questions. Does the ability to kill without risk change the calculus of when to use force? Does the distance between operator and target make civilian casualties feel more abstract, more acceptable? Does the "battle-tested" selling point that Elbit emphasizes encourage the use of military force in situations where diplomacy might otherwise prevail?
These are not questions that Elbit or any single defense contractor can answer. They are questions about the nature of modern conflict, the responsibilities of democratic societies, and the relationship between technology and morality.
The Investment Dilemma
For institutional investors—pension funds, university endowments, insurance companies—Elbit presents a genuine dilemma. Defense companies are profitable, especially during periods of conflict. Elbit's stock has performed well as global military spending has increased and as Israel's security situation has remained tense.
But many investors now operate under ethical guidelines that ask uncomfortable questions. Does holding stock in a company constitute support for that company's activities? Do the products a company makes matter as much as its financial returns? Where is the line between legitimate national defense and complicity in human rights violations?
Different institutions have answered these questions differently. Norway decided that supplying surveillance systems for the West Bank barrier crossed a line. Australia decided that security concerns with Elbit's products weren't disqualifying for a major contract. Japan decided that the ICJ case changed the calculus. Axa decided to quietly reduce exposure while maintaining indirect investments.
There is no consensus, and perhaps there cannot be. The ethical status of defense industry investment is genuinely contested, reflecting deeper disagreements about the Israeli-Palestinian conflict, the legitimacy of armed force, and the responsibilities that come with ownership.
Twenty Thousand Employees
Behind the protests, the divestments, the drone strikes, and the corporate maneuvering are twenty thousand people who go to work each day at Elbit facilities around the world. In Israel, where the company employs the majority of its workforce, working for a defense contractor carries little stigma. The country exists in a state of permanent security tension, and the defense industry is seen as essential to national survival.
For the 3,200 employees in the United States, or the workers in Germany, the UK, or Sweden, the calculation may be different. They may see themselves as ordinary engineers and technicians, contributing to their country's defense capabilities. Or they may feel conflicted about where their work ends up. Or they may not think about it much at all.
The defense industry has always occupied this ambiguous moral space. The same technologies that enable a drone strike in Gaza also enable search-and-rescue operations, border monitoring, and disaster response. The same surveillance systems that monitor the West Bank barrier could monitor a prison or an airport. Technology is, in some sense, morally neutral; its meaning comes from how it's used.
But Elbit has made a choice about who to sell to and what to advertise. "Battle-tested in Gaza" is not a neutral marketing message. It's an appeal to customers who want weapons that have proven their effectiveness against an enemy. And it's a reminder that somewhere, at the end of every supply chain, real people face the consequences of these technologies.
That's what makes Elbit more than just another defense contractor. It's a test case for what we're willing to fund, what we're willing to own, and what we're willing to accept in the name of security.