Egypt’s AI sector is picking up speed, a product of the country’s clear national AI strategy 2025–2035. Its second edition, unveiled in early 2025, outlines a roadmap to advance AI across governance, research, industry, and international cooperation, built on four pillars: governance, talent development, sector adoption, and global engagement.
The strategy aims to train 30,000 AI professionals and support the establishment of 250+ AI tech-startup companies by 2030. It also includes a focus on balanced AI Governance, AI sandboxes, flagship projects, and national data infrastructure, with a focus on Arabic-language technologies.
Following the recent AI Everything Summit in Egypt, we are witnessing the roadmap take real shape, as the Ministry of Communications and Information Technology (MCIT) announced several new initiatives, projects, and platforms meant to propel the country’s AI sector.
At the Summit, Eng. Ahmed Hassan Elzaher, CEO of Egypt’s IT Industry Development Agency (ITIDA), announced on behalf of the Minister, Egypt’s national large language model, KARNAK, is now the highest-ranking Arabic LLM in the 30–80 billion parameter range.
Flagship AI applications powered by KARNAK include SIA, a personalized tutor for Arabic and Egyptian history, and a legal assistant for citizens and SMEs. AI is also being integrated across Digital Egypt services, with AcQua auditing call-center interactions and healthcare AI supporting early detection of diabetic retinopathy, macular edema, and breast cancer.
Other launches include Torgoman, an automated translation engine; BelMasry, NLP tools for colloquial Arabic; and Loghat, an LLM-based application for English education and workforce readiness.
THE DRIVING FORCE
Elzaher shared his perspective on the main factors driving Egypt’s AI force and positioning the country as an emerging AI hub in the region.
“The primary differentiator is talent at scale,” he stated. Egypt graduates nearly 750,000 university students annually, including around 50,000 engineers and computer science graduates. This creates one of the largest technical talent pools in the EMEA region — multilingual, cost-competitive, and increasingly specialized in digital technologies. The country is investing heavily in enabling them.”
He added that Egypt’s position is further strengthened by its mature IT offshoring and global delivery industry, which serves clients across Europe, North America and the Gulf. This operational maturity — spanning quality standards, global compliance, and multilingual service delivery — provides the foundation to move AI from pilot phases to enterprise-level deployment.
He also pointed to a growing startup ecosystem integrating AI at scale, supported by a rapidly maturing national AI ecosystem and sector-focused initiatives aligned with the National AI Strategy.
“Egypt’s positioning is not aspirational. It is built on the abundant talent, growing tech startup ecosystem, and makes Egypt a platform for regional AI deployment.”
Dr. Hoda Baraka, Advisor to Egypt’s Minister of ICT for Technology Talent Development and AI National Lead, says Egypt is benefiting from a rare combination of strategic geography, scale, and market connectivity. It sits at the crossroads of Africa, the Middle East, and the Mediterranean, making it a natural base for companies seeking to build once and serve multiple regions — from the Gulf to East Africa.
Beyond its location, Baraka points to the country’s digitally engaged population. This sizable domestic market justifies AI investment, strong momentum in telecom and digital infrastructure, rapid growth in fintech and digital payments, and a growing startup and innovation ecosystem increasingly connected to Gulf capital and African expansion strategies.
“Taken together, Egypt is becoming a place where AI can be built, tested at scale, and then exported across Arabic-speaking markets and African growth corridors.”
From the private sector’s perspective, Mohamed Kassem, General Manager of Microsoft Egypt, which served as the AI Everything Summit’s innovation partner, comments on the unique advantages the country offers in terms of digital infrastructure, policy direction, and market demand.
“Egypt’s AI potential rests on aligned national priorities, market scale, and a digital sector that continues to expand in both capability and contribution to the economy.”
In addition to the country’s policy direction and national strategy, its ICT sector is expanding rapidly. ITIDA reports the sector’s contribution to GDP has exceeded 6%, up from 3.2% in 2018, with ICT revenues reaching $7.4 billion in 2025
“From Microsoft’s perspective, the most important advantage is how these signals are translating into real demand: government modernization, enterprise competitiveness, and a strong push to build digital capability at scale,” says Kassem. “We see Egypt’s opportunity in building trusted, secure AI adoption that strengthens institutions and boosts productivity across the economy — an approach we have supported through long-term partnerships in Egypt for more than 28 years.”
LOCAL TALENT
Elzaher says talent is the backbone of the country’s AI trajectory.
“Our scale allows companies to build AI implementation teams quickly, particularly in applied engineering, data analytics, NLP, and AI system integration. Through structured upskilling programs and partnerships with global technology providers, we are transitioning from general ICT capacity to AI-specialized expertise.”
He notes that gaps remain in frontier specializations — as countries worldwide scale AI adoption — particularly in Generative AI development, MLOps, large-scale model training, and compute-intensive optimization.
“However, we feel that we have an advantage as we have the talent with large numbers that enable us to bridge this gap on a local and regional level.”
He adds that these gaps are being addressed through structured collaboration with the private sector and institutions such as the Information Technology Institute (ITI), the National Telecommunications Institute (NTI), and the Software Engineering Competence Center (SECC), which provide specialized AI training, testing, and emerging technology certifications.
Dr. Hoda Baraka says Egypt’s large pool of engineering and ICT graduates represents a core structural advantage in building an AI-driven economy, providing the scale to support both domestic adoption and regional demand across the Arab world and Africa.
She notes that the Ministry has made capacity building central to the National AI Strategy through institutions such as the Information Technology Institute (ITI) and the National Telecommunication Institute (NTI), the establishment of the Egypt University of Informatics (EUI), the Digital Egypt Generations initiative, and partnerships with global technology firms offering internationally recognized certifications.
“The Digital Egypt Generations initiative is particularly important because it builds a future-ready pipeline, ensuring that AI skills development starts early and scales systematically—positioning Egypt as a sustainable regional talent engine.”
While foundational capabilities are expanding, Baraka adds that gaps remain in scaling and operationalizing AI at the enterprise and sector levels, particularly in AI product leadership, MLOps and model lifecycle management, advanced data engineering, sector-specific expertise, and responsible AI regulation.
She notes that the next phase will require deeper specialization and deployment maturity to position Egypt as a gateway for AI solutions across Africa and the Arab region.
INDUSTRY GROWTH
ElZaher also discusses the industries leading AI adoption in Egypt, noting traction in government services, healthcare, education, and financial services.
“We are seeing practical use cases in citizen service optimization, diagnostic support systems, digital learning platforms, and financial risk modeling,” he says. The next phase of growth will come from embedding AI into different industries, not only service sectors.”
Baraka says the most visible AI adoption is currently taking place in financial services and fintech, telecom, e-commerce and retail, as well as in early-stage government services.
She identifies the largest untapped opportunities as sectors where Egypt could position itself as a regional bridge, including healthcare — particularly in diagnostics, hospital operations, and claims optimization — along with logistics and trade, tourism and hospitality through multilingual AI assistants and dynamic pricing, energy and utilities, and agriculture and water in areas such as climate resilience, yield prediction, and irrigation optimization.
“These are areas where Egypt can develop solutions locally and scale them across similar market realities in the Arab region and many African economies.”
PUBLIC-PRIVATE PARTNERSHIPS
Kassem notes that private-sector partnerships are essential to realizing Egypt’s AI ambitions. “Private sector partnerships are essential because AI value is realized where people and processes meet real operational needs – supply chains, customer service, finance, and public service delivery,” he states.
“The strongest ecosystems are built when governments set direction and standards, and the private sector brings execution capacity, innovation, and delivery at scale,” he adds.
He talks about Microsoft’s role in helping connect these layers through trusted platforms and practical implementation support. He cites their work with national institutions on modernization and analytics use cases, including the Egyptian Tax Authority, where digital invoicing helped reduce tax examination cycles from days to hours, and the judiciary and Cabinet IDSC, which use Azure AI/analytics to support faster, data-driven decision-making.
Baraka reinforces this point, stating that these partnerships are essential because AI is not just a tech upgrade—it requires access to data, standards, infrastructure, and trust.
“The government can create an enabling environment, while the private sector brings speed, innovation, and commercialization.”
She outlines key partnership models for Egypt, including national data and interoperability initiatives, AI sandboxes for regulated sectors such as finance and healthcare, industry co-designed workforce programs, flagship “lighthouse” projects in education, healthcare, energy, and digital government to demonstrate ROI and reduce adoption risk, as well as co-investment in compute infrastructure, research labs, and applied innovation centers.
“If Egypt wants to be a gateway hub, PPPs should be designed not only for local impact but for regional scalability—solutions that can be replicated across Arab and African markets.”
POLICY AND REGULATION
With each technological leap, governments must reassess outdated policies and regulations that can constrain innovation. Kassem highlights the structural, regulatory, and ecosystem challenges that continue to limit access to data, cloud capacity, and responsible AI deployment.
“In Egypt and across the region, the primary constraint on AI progress is execution readiness,” he states. “In our experience, this often includes: the quality and interoperability of data across agencies and enterprises; clarity and consistency in governance for high-impact use cases; readiness of cybersecurity and identity foundations; and the availability of ‘implementation talent’ that can operationalize AI.”
Kassem adds that Microsoft focuses on strengthening these foundations alongside AI adoption. “This includes secure cloud foundations, built-in privacy and compliance controls, and responsible AI governance frameworks from the outset. In Egypt, this approach is reinforced through close collaboration with national stakeholders such as MCIT, ensuring that trust, security, and accountability remain central as AI systems move into operational use.”
Baraka notes that Egypt has made significant progress in building a structured AI governance framework through the launch of the National AI Strategy, the establishment of the National Council for Artificial Intelligence (NCAI), and the issuance of the Egyptian AI Charter, reflecting an early commitment to ethical and coordinated AI development.
Institutional efforts have been reinforced by the creation of the Egyptian Center for Responsible AI and the enactment of the Personal Data Protection Law, both of which have strengthened data governance, particularly in finance, healthcare, and public services.
Now the priority is not to start from scratch but to deepen and operationalize these achievements, Baraka states.
This includes translating governance principles into sector-specific guidelines, expanding regulatory sandboxes beyond fintech, strengthening secure data-sharing frameworks, aligning regulations to support AI exports across Arab and African markets, accelerating AI-enabled public procurement, and providing targeted incentives for AI R&D and SME adoption.
“If Egypt successfully implements its governance framework while maintaining regulatory agility, it can position itself not only as an AI innovation hub, but as a regional benchmark for responsible AI—bridging regulatory trust between Africa and the Arab world.”
WHAT THE FUTURE ENTAILS
“I see Egypt’s future as the regional hub for artificial intelligence. Our talented workforce will be empowered to develop and deploy cutting-edge AI solutions, and these advances will have a real impact—enhancing people’s lives and driving sustainable growth for our national economy,” Elzaher shared.
Baraka believed that in five years’ time, Egypt’s success would not simply be measured by the number of AI startups or the volume of investment attracted— instead, it would be measured by the real impact AI has on people’s lives.
Practically, this means Egypt becoming a regional hub for AI serving Arabic-speaking markets and African growth corridors, with companies scaling AI solutions across sectors like fintech, logistics, healthcare, energy, and govtech, and government services showing measurable improvements in speed, targeting, compliance, and citizen experience.
Success also involves AI driving economic inclusion, a mature workforce in data engineering, MLOps, AI leadership, and responsible AI governance, and Egypt being recognized as a trusted environment supported by clear frameworks and regulatory credibility.
“Most importantly, success would mean that AI contributes to job creation, productivity growth, SME competitiveness, and improved quality of life—not just technological advancement,” she adds. “If Egypt can combine applied AI deployment, strong governance, talent depth, and measurable social and economic impact, it can firmly establish itself as a gateway for building in Arabic, scaling into Africa, and delivering AI that serves people across both regions.”
From Kassem’s perspective, success would mean public services using AI to boost efficiency, financial institutions applying advanced analytics responsibly, energy systems operating with greater precision, and Egyptian startups building AI solutions that compete regionally — all supported by growing local expertise.
“From Microsoft’s perspective, sustainable AI leadership requires three foundations moving in parallel: secure and scalable cloud infrastructure, clear governance and responsible AI frameworks, and a workforce equipped with both technical and AI fluency skills. Egypt has momentum across all three, but maintaining it requires consistency,” he says.
He adds that risks are less about technology and more about coordination: talent shortages, fragmented data, and uneven governance can slow scaling. “Egypt’s opportunity lies in continuing to align policy ambition, institutional capability, and ecosystem collaboration. When those elements advance together, AI moves from isolated innovation to lasting economic impact.”
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