The development of artificial intelligence and data infrastructure in Armenia is entering a new phase. However, while the creation of computing power and data centers is a vital step, industry experts warn that the main challenge still lies ahead. This was stated by Arsen Babayan, CTO of Ineco Group, discussing the prospects of the AI sector in Armenia.
From Infrastructure to a Crisis of Trust
According to Babayan, the government's announced plans to create new data centers indicate that hardware and infrastructure issues are close to being resolved. "This means that computing power will become accessible over time and even become a commodity in a sense. However, the real obstacle lies elsewhere—in the trust toward the models and the results they produce," he noted.
He estimated that, especially in small countries like Armenia, the boundaries between the private, public, and even defense sectors are much thinner than in developed nations. For this reason, untrustworthy AI systems could turn into a national security risk. "This is not just a niche issue. It could become a serious threat—whether in healthcare, the financial system, or border security. We cannot implement, let alone scale, technologies whose decision-making logic we do not understand," Babayan emphasized.
Explainable AI as "Real Sovereignty"
Babayan is convinced that the concept of "sovereign AI" is not limited to the localization of data or models. True sovereignty is only possible when the explainability of models (Explainable AI, XAI) is ensured. According to him, various approaches are currently being used globally in this direction, ranging from post-hoc explanations to ensuring model interpretability during the design phase.
"If we do not focus on explainable and transparent models, we may find ourselves in a situation where countries or companies that cannot 'open the black box' will be limited to consumer-level solutions. Meanwhile, strategically significant applications will remain in the hands of those who possess that capability," he said.
Babayan also drew attention to regulation and compliance requirements. He noted that companies operating in Armenia, particularly in the financial and defense sectors, will inevitably face strict requirements set by the Central Bank and the Ministry of Defense. In this context, he suggests creating a unified "plug-and-play" governance and compliance toolkit at the state level. This would help companies grow rapidly while maintaining a high level of security.
"If the issues of infrastructure and models are to be resolved, then this must be the next crucial direction," Babayan concluded.
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