In pivoting to AI, Armenia is striving to take advantage of its strong educational tradition in such areas as mathematics and engineering, as well as its vibrant tech and innovation sector. (Photo: gov.am)

Exploring National Security Dimension of AI Development in Armenia

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By Irakli Machaidze

Armenia is reassessing its national security foundation with the evident aim of replacing military might with economic power as the central pillar for ensuring sovereignty.

Prime Minister Nikol Pashinyan is a leading advocate of remaking Armenia’s security architecture. “When the army is your primary tool for security, you could say you have no security at all,” he said at a September conference dedicated to security issues. “The military should be the last tool in the security system. And the more tools you have before it, the better.”

Pashinyan wants to make a strong economy the most powerful instrument in his national security toolkit. The $500-million plan to build the region’s first artificial intelligence hub in Armenia highlights Pashinyan’ strategy. The initiative took a major step forward in November when US regulators approved the transfer of advanced Nvidia Blackwell GPUs.

The project, led by Firebird, a startup apparently bankrolled by an ultra-wealthy member of the Armenian diaspora, is backed by the Armenian government.

The operating model gives Yerevan a substantive stake in how future AI capabilities develop in the region. That matters as AI moves deeper into sensitive sectors such as healthcare, finance and national security. AI has been described as the 21st century version of electricity, with GPU farms compared to generators: Armenian officials and experts believe that building a big lead in this area will foster a deep sense of security.

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“Armenia was not able to import these kinds of goods [GPU chips] from the US before and now we have a very interesting dynamic,” said Leonid Nersisyan, a defense analyst and research fellow at APRI Armenia. Developing AI capabilities is “kind of defending Armenia from being in such a weak position, such as it was after 2020.”

Nersisyan was referring to the year Armenia experienced an overwhelming defeat against Azerbaijan during the first phase of the Second Karabakh War. The Armenian military proved no match for an upgraded Azerbaijani force, which employed drones to great effect for the first time in the annals of global warfare.

In pivoting to AI, Armenia is striving to take advantage of its strong educational tradition in such areas as mathematics and engineering. The country is also seeking to tap into diaspora expertise. Today, global firms like Nvidia, Cisco, Adobe, Synopsys and many more have operations in Yerevan.

With limited natural resources, the country’s investors and educators have increasingly turned to tech as a driver of growth and global integration, and the sector now includes more than 1,200 tech companies with a combined annual turnover of more than $2 billion, according to local nonprofit Bootcamps.

“The larger the economy you have, the more you can invest in your armed forces,” Nersisyan said. “The [Nvidia deal] actually opens the door for other deals, so local companies may be interested in having more advanced American technology for their products and that can also have some extensions to defense technologies too.”

Armenia is signaling it is not rushing blindly into the AI field; officials are pursuing partnerships with a range of international players. In addition to the Nvidia chips for the planned data center, the country is exploring AI and innovation cooperation with China within the framework of their strategic partnership. In early 2025, the Ministry of High-Tech Industry also signed an agreement with France’s Mistral AI, Europe’s only serious challenger to US and Chinese AI giants.

Meanwhile, earlier this year SpaceX’s Starlink launched its services in Armenia. In a region where conflicts with Azerbaijan have repeatedly targeted communication lines, satellite Internet is not just a convenience, it is resilience.

While AI might provide a big boost for Armenia’s defense capabilities, regional observers generally agree Armenia’s national interests are best served by focusing on developing trade possibilities, not striving to achieve strategic parity with long-time enemy Azerbaijan in the hopes of recovering Karabakh.

“Armenia is not in a position to compensate for the large capacity gap between itself and Azerbaijan – which should not just be seen in isolation, because Azerbaijan in practice has access to the technological capability of the Turkish military as well,” Svante E. Cornell, the Director of the Institute for Security and Development Policy, told Eurasianet.

Given the provisional peace deal signed in August between Armenia and Azerbaijan, Cornell indicated that Russia now is Armenia’s main security threat. “The best course of action is to work for the rapid opening of trade routes, which would boost Armenia’s economy and its ability to strengthen its independence versus Russian continued influence in the country,” he said

Considering the current strategic balance between Armenia and Azerbaijan, AI is unlikely a game-changer in the defense realm.

“Azerbaijan’s advantage comes from years of investment in drones, precision weapons and close cooperation with Turkey and Israel,” said Zaur Shiriyev, a non-resident scholar at the Berlin-based Carnegie Russia EurasiaCenter. “Advanced chips do not turn into weapons on their own, and they do not replace procurement, training, alliances or the broader strategic environment.”

“Where the new [AI-driven] infrastructure can help is in civilian resilience. It can improve cybersecurity, strengthen the protection of critical infrastructure and support more efficient public services,” Shiriyev continued. “These benefits contribute to overall stability, but they should not be confused with changes in military power.”

(Irakli Machaidze is a contributing writer covering the South Caucasus for www.eurasianet.org, where this story originally ran on December 5.)

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