Armenia Emerges As A Tech Powerhouse

Armenia shot from relative obscurity to world prominence not too long ago over tensions with neighboring Azerbaijan. However there may be one more reason to concentrate to this rugged, mountainous nation: it’s quick evolving tech sector.

It has emerged as a tech powerhouse with the presence of worldwide gamers and a vibrant startup ecosystem. And whereas the nation stays politically near Russia and Iran as a counterbalance to hostile neighbors on the west (Turkey) and the east (Azerbaijan), it’s personal sector stays firmly fastened on the West, notably the US with its close to million-strong Armenian diaspora.

“We contemplate ourselves a community nation,” stated Rem Darbinyan, founding father of a startup known as Viral Mango, which matches manufacturers to influencers all over the world. “We’ve got generations of Armenians dwelling abroad.”

In October, Adobe CEO Shantanu Narayen was within the vibrant capital Yereven to talk on the nation’s Silicon Mountains conference and open a brand new Adobe constructing. Throughout city, dozens of startups displayed their improvements on the annual Digitec expo. Already, the small, landlocked nation has produced one unicorn (Picsart) with extra on the best way.

With the snowcapped summit of distant Mount Ararat – the Armenian nationwide image that rises throughout the border in Turkey – seen on clear days, Yerevan is full of refined eating places crowded with tables of younger tech entrepreneurs ingesting apricot brandy and consuming platters of stuffed grape leaves as they talk about the newest improvements.

Numerous indexes present Armenia because the rising tech powerhouse of the Southern Caucasus area, a legacy of its position as one of many Soviet Union’s high expertise facilities – the USSR’s first general-purpose computer systems had been developed there within the early Nineteen Sixties

That historical past faltered in the course of the breakup of the Union and the following struggle with Azerbaijan to outline Armenia’s nationwide borders – a battle that continues to reverberate right this moment. However, Armenia recovered and has drawn on the success of its diaspora in the US to develop into one of many strongest economies within the area.

Individuals like Noubar Afeyan, co-founder of biotechnology powerhouse Moderna, Alexis Ohanian, co-founder of Reddit and Avie Tevanian, former CTO of Apple and creator of the macOS working system, have all remained related to the nation.

Following its independence in 1991, Armenia started growing as a behind-the-scenes builder of software program for Western firms, many based by Armenians. However step by step, it has climbed the worth chain to supply merchandise of its personal.

That pattern solely accelerated with the outbreak of Russia’s struggle with Ukraine which drove firms from each international locations to relocate to Yerevan. The following inflow of capital drove up the Armenian dram towards the greenback, hurting the competitiveness of the nation’s outsource trade. In the meantime, a small enterprise capital trade coalesced to fund tech improvement and right this moment startups can elevate as a lot as $1 million domestically earlier than turning to VCs overseas.

Consequently, the nation’s financial system is booming – with projected 7 % progress this 12 months, based on the Worldwide Financial Fund, making it the quickest rising financial system within the area.

Many locations on the planet have developed expertise hubs and startup ecosystems, however for Armenia it’s a matter of survival.

“The way forward for Armenian financial improvement in science-based, high-margin merchandise,” the nation’s minister of high-tech trade, Robert Khachatryan, advised Forbes. He defined that as a result of the nation is landlocked, logistics prices imply it can’t export bodily items at aggressive costs.

The tech trade is now the nation’s the fastest-growing sector, increasing by greater than 30 % in 2023, surpassing useful resource extraction and agriculture as the first drivers of the financial system. And it’s drawing overseas funding. Apart from Adobe, most of the world’s strongest expertise corporations have arrange store there, together with Microsoft, Google, IBM and Cisco.

Synthetic intelligence, after all, is the recent expertise on supply. Picsart, a photograph and video modifying platform launched in 2011, has a staff of information scientists constructing the corporate’s personal generative AI basis mannequin. Krisp, a newer startup, makes use of synthetic intelligence to alter the accents of Filipino and Indian English audio system in actual time into plain midwestern U.S. pronunciation – a product it markets to name facilities serving North America.

On the DigiTec expo, dozens of startups displayed their AI wares, from Viral Mango with a platform that matches influencers to manufacturers, to Orders.co whose AI software program, on the contact of a button, creates interactive menus for eating places who need to combine with meals supply companies.

Armenia was late getting on the AI bandwagon however is catching up quick. Whereas the nation’s college system was robust on math, there have been few machine-learning school obtainable to information college students in 2016, when machine studying was already sweeping computer-science departments within the west. Hrant Khachatrian, a younger researcher, and 4 associates rented an residence within the capital and huddled round a single GPU to start out exploring on their very own.

The neighborhood and quantity GPUs grew into considered one of Armenia’s first AI labs: YerevaNN. By 2019 YerevaNN was publishing papers in high AI conferences, together with Laptop Imaginative and prescient and Sample Recognition Convention (CVPR).

Universities started catching up, establishing graduate applications in AI. In the present day, Khachatrian is working with Yerevan State College to fold YerevaNN into a brand new AI lab being arrange by the college, lastly giving college students there a spot to conduct analysis.

The AI analysis neighborhood in Armenia has grown to over 600 individuals. Nevertheless, an absence of compute sources threatens its competitiveness. GPUs are onerous to return by and costly when they’re obtainable.

That’s the place the personal sector is available in. Enterprise capital and Western connections among the many nation’s entrepreneurs are serving to startups construct merchandise regardless of the {hardware} constraints.

“We now have enterprise funds in Armenia,” stated Narek Vardanyan, CEO of Prelaunch.com, a validation platform creators can use to gauge market demand for his or her merchandise earlier than growing them. “Beforehand, Armenian firms needed to go to Silicon Valley, for early-stage funding, we are able to elevate $2 million to $3 million with Armenian funds.”

The neighborhood can also be targeted on constructing human capital with personal initiatives resembling Armath (a contraction of Armenia and Math), sponsored by the Union of Superior Know-how Enterprises (UATE), which runs engineering labs throughout Armenia for college kids as younger as 10.

At a village college within the countryside north of Yerevan, bright-eyed middle-school college students collect in a classroom to exhibit their initiatives – one, a shoebox-sized ‘sensible dwelling,’ with a keypad lock, smoke detector and automatic lighting cobbled along with sensors, LED lights and bits of wire. Alongside a windowsill, a row of potted vegetation are fed by a student-built automated irrigation system. The scholars, in the meantime, work at screens connected to pocket-sized Rasberry Pi computer systems.

“In Armath, every little thing is open supply and it’s all project-based studying,” defined Arevik Hovhannisyan, a instructor. “The purpose is to have the youngsters perceive the fundamentals of engineering, and perhaps resolve to develop into an engineer.”

Armath works as a public-private partnership – firms sponsor the labs, that are then donated to varsities the place native authorities pays for his or her operation. To date, UATE has established greater than 650 labs throughout Armenia and exported the mannequin to a number of different international locations.

Within the far north of the nation, sandwiched between steep mountain slopes, college students at one other program collect within the night for people dances and to indicate off their initiatives. That is Actual College, one other UATE initiative, a four-year vocational program for prime schoolers, giving them fingers on expertise constructing expertise options.

Again within the capital, youngsters 12 to 18 can attend TUMO, an extracurricular bootcamp the place they study to program and construct software program. The inside feels extra like a well-funded tech firm than a college, with custom-designed workstations on wheels and a carpeted, amphitheater-style assembly place. “We present them that every little thing will be created by them on their very own,” stated Zara Budaghyan, a TUMO graduate herself.

One other initiative, AI Generation, hopes to embed machine-learning training in excessive faculties throughout the nation. Initially funded by Moderna cofounder Noubar Afeyan, AI Technology already has lots of of scholars enrolled in excessive faculties in 16 cities hoping to develop synthetic intelligence researchers and engineers.

“We need to present Armenian tech ecosystem on the map of like world market,” stated Sargis Karapetyan, a tech entrepreneur and UATE’s interim CEO, including that the nation wants extra exterior capital. “One other goal are individuals who want to open branches in Armenia, to broaden and discover good expertise.”