Armenia’s AI leap: how open access and strategic alliances could supercharge a small country’s high-tech future

A workshop session at TUMO

As much of the world debates AI’s impact on jobs and economic structures, Armenia – a small nation with perhaps surprisingly global ambitions – sees artificial intelligence as a way to overcome geographical isolation and geopolitical challenges. The country is now embracing AI at a national level, nurturing human capital and incubating startups.

Although this has been percolating for a few years now, a recent pivotal shift in AI accessibility is opening new doors. This is true not just for Armenia but for smaller players in general: China’s DeepSeek has upended the AI world by making its technology open access. For Armenia, this is an unexpected boon. Instead of investing in high-end GPUs and waiting years for delivery and setup, AI democratization and lower entry barriers are enabling the country to redirect those resources toward training engineers for a startup ecosystem.

This should align with Armenia’s broader strategy of forging key global partnerships. One major milestone is its collaboration with Mistral AI, a leading French AI company recently recognized by IBM as a top innovator. With the ethnic Armenian Jean-Charles Samuelian on its board, the deal inked this month offers an opportunity for Armenia to carve out a niche in the European AI ecosystem. As France pursues its own national AI strategy, deepening ties between Yerevan and Paris could position Armenia as an AI partner for Europe.

Other recent high-profile developments include Armenia’s signing of a Strategic Partnership Charter with the United States. This was done just days before Donald Trump’s inauguration. While in December, ServiceTitan — a unicorn software company co-founded by the Armenian-Americans Ara Mahdessian and Vahe Kuzoyan — raised 625 million US dollars in its IPO, pushing its valuation higher.

AI giant NVIDIA also has a presence in Armenia, and now SpaceX’s Starlink is planning the nationwide installation of its high-speed satellite internet. With government approvals in place and testing underway, Starlink could be a game changer for Armenia’s digital infrastructure. Beyond enhancing connectivity, especially in rural areas, the satellite network has significant security implications. In a mountainous region marked by conflicts – such as Armenia’s disputes with Azerbaijan – Starlink offers a lifeline for maintaining internet access during crises and ensuring digital resilience during external disruptions.

Indeed, at the World Congress on Innovation and Technology in Yerevan last autumn, Elon Musk sent a message expressing excitement about “working with the local tech community on some exciting projects – from space exploration to developing open and transparent AI that pushes the boundaries of human understanding.”

These developments reflect an underappreciated reality: Armenia is not merely a passive participant in the global tech revolution but an emerging hub with the potential to make a meaningful impact. Its per capita GDP of around 9000 US dollars is still on the low side, enabling attractive labour costs. However, it is growing at some nine per cent, reflecting the potential for a boomtown.

That is why the Foundation for Armenian Science and Technology (FAST), of which I am executive director, is already promoting the expansion of AI education and entrepreneurial opportunities, laying the groundwork for sustained innovation. If Armenia prioritizes talent development over infrastructure-heavy investments, it could establish itself as a regional high-tech hub – one that punches well above its weight.

A history of innovation: from Soviet-era tech to a diaspora-driven future

Despite its small size and turbulent history, Armenia has long punched above its weight in science and technology. Nestled in the Caucasus with just three million people, the country has survived centuries of hardship, from the genocide of 1915 to Soviet rule and, more recently, the ethnic cleansing of Nagorno-Karabakh. Yet today’s economic transformation is not entirely new.

During the Soviet era, Armenia was considered the “Silicon Valley of the USSR”, producing some of the first general-purpose computers. The Mergelyan Institute, named after Sergey Mergelyan – the Soviet Union’s youngest Doctor of Science in Mathematics – became a major innovation hub. By the 1960s, Armenia’s R&D spending was among the highest in the Soviet bloc, reaching 2.6 per cent of GDP, a figure that surpasses many OECD countries today. The country led the Soviet Union in per capita scientific publications and developed cutting-edge technologies, including the Nairi computer series and military innovations.

Today, another key driver of Armenia’s tech sector is its vast global diaspora – an estimated seven million people, more than twice the country’s population. Armenian entrepreneurs and investors, from ServiceTitan’s co-founders to Reddit’s Alexis Ohanian, have helped connect Armenia to global markets and capital. Multinational giants like Adobe, Cisco, NVIDIA, Siemens and Synopsys have established operations in Armenia. This has often been accomplished through diaspora advocacy. Meanwhile, initiatives like the TUMO Center for Creative Technologies – a pioneering after-school tech education programme –have been exported from Yerevan to cities like Paris and Berlin.

AI education and the future of Armenia’s tech ecosystem

Education has been central to Armenia’s quiet but steady rise in the tech world. Today, initiatives like Generation AI – launched by FAST in collaboration with the ministry of education – are integrating advanced math and AI curricula into public schools, with the goal of reaching 85 per cent of high school students by 2026. Already, over half of Armenia’s high school students have access to the programme, creating a future pipeline of AI innovators. The programme’s rapid expansion is fuelled by diaspora engagement, further accelerating Armenia’s technological leap.

The long-term vision is clear. While Armenia cannot compete in sheer numbers, it can educate enough highly skilled professionals to establish itself as a meaningful player in the AI race. Schools are teaching AI to teenagers as part of a broader vision that integrates STEM education with national development efforts, echoing Armenia’s deep-rooted culture of scholarship. This dates back to medieval universities like Gladzor and Tatev.

Of course, Armenia’s difficult regional position – bordering Turkey and Azerbaijan, while managing complex relationships with Russia and Iran – shapes its tech ambitions. And broader geopolitics will also play a role. As the US and EU tighten restrictions on AI exports to China and consolidate semiconductor supply chains through initiatives like the CHIPS Act, smaller nations must navigate these fragmented dynamics wisely.

But there are advantages as well. With strong diaspora networks and deep connections to both western and eastern tech hubs, Armenia is well-positioned to bridge these competing AI ecosystems. The country is attracting an influx of tech talent fleeing instability in Russia and Ukraine, echoing Israel’s experience in the 1990s when it absorbed Russian-speaking engineers and scientists.

The rise of South Korea as a tech powerhouse also offers lessons. Like Armenia, South Korea built its success on education, human capital and strategic global partnerships. Other countries like Israel, Singapore and Estonia also provide valuable models. Armenia already ranks 63rd globally in the 2024 Global Innovation Index and dominates venture funding in the South Caucasus. With initiatives like Plug & Play launching startup accelerators in Yerevan, Armenia’s tech ecosystem is gaining international recognition.

Armenia faces hurdles – geographic isolation, limited resources and a brain drain. Yet, its growing roster of success stories – startups like Krisp, Activeloop, PicsArt, RenderForest, and SuperAnnotate – shows that innovation can thrive despite adversity. As global investors look for underappreciated opportunities, Armenia’s tech sector presents a compelling case study of how education, technology and a connected diaspora can drive an economic transformation.

While this may surprise many, it is all logical. In an AI-driven future, size is no longer the decisive factor – agility, education and access to cutting-edge tools will determine success. With a growing emphasis on AI education, strategic partnerships, and the unexpected advantage of open-access AI breakthroughs like DeepSeek, Armenia can legitimately aspire to become a player in the world’s most important technological race.

Suzanna Shamakhyan is the Executive Director of the Foundation for Armenian Science and Technology (FAST), a diaspora-created NGO with a vision of Armenia transforming into an Innovator Nation and a global Artificial Intelligence hub.

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Armenia, Artificial intelligence, science, South Caucasus, technology