Pakistan, with over 60% of its population under 30, stands at a pivotal juncture. As global economies pivot to artificial intelligence (AI) and digitalization, Islamabad has made timely strides. In June 2025, Pakistan formalized its first AI policy through the Ministry of Information Technology and Telecom, positioning AI as a core pillar for economic growth, governance reform, and cybersecurity enhancements.
Pakistan’s formal AI policy in June 2025 positions artificial intelligence as a central driver of economic growth, governance reform, and national security.
Complementing this policy, the government allocated 2,000 megawatts of surplus electricity for AI data centers and Bitcoin mining. With the national installed capacity nearing 46,600 megawatts and around 14% of it unused, this initiative smartly leverages idle energy to power a future-facing digital economy.
Pakistan’s AI strategy builds on its broader digital ambitions. The Presidential Initiative for Artificial Intelligence & Computing (PIAIC), launched in 2018, continues to upskill tens of thousands in AI, blockchain, IoT, and cloud computing annually. Karachi’s new 500-acre Special Technology Zone is another bold step, aspiring to nurture innovation in health tech, agri-tech, cybersecurity, and fintech. These moves demonstrate intent not just to consume global technology, but to embed AI within the fabric of national development.
The economic foundations are cautiously optimistic. The economy grew at 2.7% in FY25 and reported a $1.9 billion current-account surplus. The central bank’s decision in June 2025 to cut policy rates to 11% has stimulated lending, including in the tech and SME sectors. The digital economy currently contributes about 5% of GDP; several forecasts suggest it could double by 2030, particularly if AI-led applications in agriculture, logistics, and healthcare are scaled.
However, a robust AI-led industrial policy will require Pakistan to confront several persistent challenges. Infrastructure reliability and energy security must be guaranteed. While the repurposing of surplus electricity for data centers is innovative, these systems must remain stable and increasingly green. Solar energy already accounts for about 25% of Pakistan’s electricity generation, but overcapacity alone does not equate to sustainability. Strategic planning will be key.
Surplus energy, 2,000 MW, is now allocated to power AI data centers and Bitcoin mining, utilizing 14% of previously idle national capacity.
Equally critical is human capital. While PIAIC and similar programs produce talent, retaining it is another matter. The global tech market is hungry, and Pakistan must offer a competitive environment for developers, researchers, and engineers to stay. Incentives for product development, rather than just service outsourcing, are essential. At the recent AI Everything Global Summit in Dubai, several Pakistani start-ups made an impact, suggesting that the potential exists. Whether that potential is cultivated domestically depends on incentives, investment, and infrastructure.
Ethical and regulatory frameworks also matter. Pakistan’s participation in the UN’s “Group of Friends for Digital Cooperation” and the Digital Cooperation Organization aligns it with international best practices. The use of AI in NADRA’s biometric and identity systems shows domestic integration. But comprehensive privacy, cybersecurity, and data protection frameworks are still evolving. If AI is to become a central economic pillar, public trust and global credibility must accompany technical progress.
Private sector partnerships and foreign investment are vital. The Special Investment Facilitation Council and Technology Zones Authority have streamlined procedures, and initiatives like the Pakistan Crypto Council illustrate growing investor confidence. Dialogue with global players, including those in the Gulf and Southeast Asia, can further diversify capital and technology flows.
Most importantly, Pakistan’s AI strategy must be tied to national development goals. Whether it’s reducing food insecurity through smart agriculture, improving healthcare access via predictive analytics, or automating public administration to curb corruption, AI must solve real problems. If it becomes an elite plaything or solely a security apparatus, its economic potential will remain underutilized.
The Presidential Initiative for AI & Computing has trained thousands, but talent retention and domestic innovation incentives remain critical for long-term competitiveness.
Pakistan is not late to the race. The foundation is present, policy clarity, energy allocation, education reforms, and nascent global engagement. What remains is execution. If pursued thoughtfully, Pakistan can evolve from a technology importer to a regional AI knowledge hub, using its demographic edge and strategic location to advantage. In an era defined by intelligent machines, intelligence in policymaking will be our real differentiator.
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.
