The year 2025 came with new developments in the tech world and changed the course of Artificial Intelligence (AI) and its role in the global economy. The coming of DeepSeek and new tools by Open AI has set the path for an AI-driven economic competition globally, increasing innovation and productivity in the global tech industry by bridging AI and economy together. However, in countries where digital innovation and transformation are still in their early stages, this integration of AI into the economy comes with challenges alongside opportunities, like Pakistan. As the world navigates around AI, it is essential to assess Pakistan’s standpoint on the same and explore potential policy options to rise as a competitive player in the global AI economy, through integrating AI into its economic policies.

According to a report by PwC, AI is expected to contribute up to 15.7 trillion to the global economy by 2030

To begin with, AI has brought a considerable increase in efficiency and growth in the global tech industry. AI is playing its role in software development, the formation of data analytics, and establishing stronger cybersecurity for huge role players like Amazon, Meta, Google, Microsoft, etc. These Industries that have invested in AI-powered innovation have experienced increased productivity, cost saving, better customer engagement, and thus increased economic activity. According to a report by PwC, AI is expected to contribute up to 15.7 trillion to the global economy by 2030.

In developed economies like the US, China, and Russia, AI-driven growth is fueling investments of billions of dollars in cloud computing, semiconductor manufacturing, etc

Additionally, AI is a champion of automating repetitive tasks which may lead to a reduction in the need for human labor, while on the other hand, it is creating new job opportunities in fields like AI Research, Software Engineering, and data science. Moreover, in developed economies like the US, China, and Russia, AI-driven growth is fueling investments of billions of dollars in cloud computing, semiconductor manufacturing, etc. This has given rise to tech giants such as Google, Microsoft, and Alibaba who are incorporating AI into their mechanisms making more space for AI in the global market.

Pakistan, being outpaced in adopting AI across its industries, faces obstacles in this journey. Among these obstacles, the lack of Research and Development culture in the field of AI stands first. There are close to no large-scale initiatives to promote research on AI technologies in Pakistan, besides most of the applications driven by AI in Pakistan are also imported and not locally developed.

Next on this list is the lack of economic focus on AI infrastructure in Pakistan. There is a huge lack of investments in AI-driven tech, including high computing power, cloud computing, big data capabilities, large language models, and smart software. Moreover, this lack of investment leads to the absence of a clear and concise policy regarding the adoption of AI, its governance, its ethical guidelines, and data protection measures, making it unpredictable for foreign investors.

Pakistan needs to consider some important policy alternatives. Among these, firstly is the dire need to ensure AI-focused degree programs and trainings. Second is the promotion of the Research and Development culture in the field of AI in Pakistan

For these obstacles to be overcome, Pakistan needs to consider some important policy alternatives. Among these, firstly is the dire need to ensure AI-focused degree programs and trainings. Second is the promotion of the Research and Development culture in the field of AI in Pakistan. To ensure this, research hubs and innovation centers powered by AI are needed to be made, through collabs between educational institutions and tech companies. Also, AI startups need to be encouraged by tax incentives.

Industries and enterprises across Pakistan need to be encouraged to adopt AI in their functioning to ensure a smooth transition of technology

Furthermore, a national AI policy needs to be formulated. This must include an ethical framework, regulatory guidelines, and investment priorities that are in alignment with best practices in the field of AI adopted internationally to attract investors. Examples of China and the US can be followed in formulating this policy. Similarly, for Pakistan’s AI-driven tech industry to progress smoothly, a reliable AI infrastructure needs to be built. This must include large-scale investments in high-performance computers, cloud servicing, and open access to AI data settings to first promote research and then facilitate the manufacture of chips and semiconductors locally. Lastly, industries and enterprises across Pakistan need to be encouraged to adopt AI in their functioning to ensure a smooth transition of technology.

AI holds the potential to set the country on the path to progress both economically and technologically in today’s AI-driven era

In brief, AI holds the potential to set the country on the path to progress both economically and technologically in today’s AI-driven era. Pakistan too has the opportunity and potential to grow and progress through AI. However, Pakistan faces some mentioned shortcomings in this regard which can be overcome by adopting certain policy alternatives through promoting the culture of AI across all fields leading to the functioning of the economy and industries. This will not only lead to the growth of the economy for Pakistan but also its rise as an AI hub in the region. For that, Pakistan needs to act faster and act now!

Disclaimer: The opinions expressed in this article are solely those of the author. They do not represent the views, beliefs, or policies of the Stratheia.