Overview:
Pakistan’s IT sector is on the verge of a significant transformation, fueled by the growing global emphasis on Artificial Intelligence (AI). As international clients increasingly demand AI integration, companies are eager to incorporate AI into their processes for competitive advantage, even if it may not be strictly necessary for their operations. Additionally, the development of Pakistan’s Digital Public Infrastructure (DPI) is set to facilitate digital upgrades, making AI more mainstream. The government’s initiative to create a digital identity for citizens aims to centralize social, economic, and governance data, marking a major technological shift for the country.
Economic Potential:
- Transformation Catalyst: The IT industry is emerging as a key driver for economic recovery amidst macroeconomic challenges.
- Projected Value: By 2030, digital transformation could yield up to PKR 9.7 trillion (USD 34.9 bn approx.) in economic value, according to Access Partnership (2021).
- AI Impact: In 2023, Google’s AI solutions generated PKR 3.9 trillion (USD 14 bn) in benefits for Pakistani businesses, marking a 222% increase since 2020.
Global Context:
- AI’s Global Contribution: AI is projected to add USD15.7 trillion to the global economy by 2030, surpassing the combined outputs of China and India.
- AI was a major sector that attracted global VC funding for the last few years – peaking at USD 114 billion in 2021 and approximately USD 94 billion in 2024 so far.
- AI investment could approach USD 100 billion in the U.S. and USD 200 billion globally by 2025, according to Goldman Sachs Economics Research.
- Pakistan’s Share: Experts estimate that AI could contribute between USD 10 billion and USD 20 billion to Pakistan’s economy by 2030.
Current Landscape:
- Adoption Rates: Major IT export companies report that up to 30% of their solutions are AI-based due to high international demand.
- Infrastructure Needs: Stakeholders highlight the necessity for local data centers with AI capabilities, as current reliance on foreign data centers limits potential.
Challenges:
- Data Sensitivity: The government restricts sensitive personal data from being stored abroad, which hampers local AI development.
- Infrastructure Gaps: Currently, Pakistan lacks the necessary data centers for AI, relying on external services.
Future Outlook:
- Optimism for Development: There is hope that data centers with AI capabilities will emerge in Pakistan within the next one to two years, contingent on readiness from both public and private sectors.
- Collaborative Efforts Required: Establishing AI data centers will require a consortium of stakeholders to create opportunities around this infrastructure.
Technological Framework:
- Technology Stacks: Various technology stacks will support these data centers, encompassing essential components like hardware, software, databases, middleware, storage, and networking systems.
By focusing on these areas, Pakistan stands poised to leverage AI for substantial economic growth and technological advancement in the coming years.
Major AI Startups in Pakistan:
Vyro: Vyro makes content creation easier with AI-powered tools, offering 20 apps that help over 5 million people around the world create genAI content.
traversaal.ai: Traversaal AI is a B2B AI startup helping enterprises build end-to-end AI solutions. From self-service APIs to full-stack SaaS products, it provides tools like online LLM endpoints, enterprise RAG products, and LLM-powered search engines.
Xylexa, Inc: Xylexa is a digital health company using AI and computer vision to power a SaaS platform that helps caregivers with fast, accurate, and cost-effective medical image diagnosis.
Adlytic AI: Adlytic AI turns existing camera feeds into real-time insights, combining video analytics with POS and online store data. With AI-powered dashboards and GenAI-driven reports, it helps retailers optimize operations and boost revenue through smarter, data-driven decisions.
Farmdar : Farmdar uses AI and space technologies at scale for sustainable agriculture.