Opinion
By Nikodimos Damianou*
Ask any country today and chances are they’ll tell you they want to be a hub for technological development, especially in the fast-evolving world of artificial intelligence (AI). AI is quickly becoming the backbone of our digital future. It drives economic growth, shapes geopolitics, and boosts a country’s global standing. Naturally, the race to attract investment in AI is more competitive than ever.
That’s what makes the outcomes of the President of the Republic’s recent visit to the United States so important—especially in the context of Cyprus’ broader strategy on innovation and technology.
Beyond a Goodwill Tour: A Strategic Play in the AI Arena
To truly understand the visit’s impact, we need to see it not as a one-off success, but as a piece of Cyprus’ long-term strategy, what we call “Vision 2035.” For years, we've spoken about turning Cyprus into a regional tech hub. But now, for the first time, we’re actually ready to have serious discussions with global tech giants, especially those in Silicon Valley that are shaping the world’s digital future. That alone is a major success.
The Tech Sector’s Rapid Rise—and the Work Ahead
Cyprus has more than just a good location. The country’s strong economic performance and rising geopolitical relevance are helping set the stage. Four key factors are driving the island’s emergence as a tech and innovation hub:
- Tech Growth: Since 2012, Cyprus’ tech sector has grown by 277%. It’s the fastest-growing part of the economy, expanding by 15% annually and contributing around 14% to GDP. Much of this is thanks to a surge in foreign investment, especially over the past two years, with major global and startup companies setting up shop in Cyprus in areas like fintech, gaming, software development, healthtech, and AI. The island now ranks third in Europe for tech sector growth and first in Southern Europe for fintech and gaming.
- Startups and Innovation: Cyprus now has more than 500 active startups, and it ranks among the top 45 startup ecosystems globally. It’s also sixth worldwide for investment success among startups valued under €1 billion—with further upgrades expected in 2025.
- Research and Development: Cyprus has been named a “Strong Innovator” by the EU for three years running. It boasts more than 3,500 researchers, 12 universities, 7 centers of excellence, and over 20 research infrastructures. The country also performs well in EU research programs.
- Tech Talent: The country saw the biggest percentage increase in tech professionals in its workforce between 2023 and 2024—up 17%. The ICT workforce has nearly doubled in the past decade, reaching around 30,000 people. Cyprus now has double the talent density of many neighboring countries.
All these elements fuel each other. But despite these strengths, there’s still work to be done. Cyprus needs targeted actions to make its innovation ecosystem sustainable, dynamic, and globally competitive. That means building an environment where innovative thinkers can turn ideas into products, and where tech companies want to stay and grow.
What Cyprus Can Learn from Innovation Leaders
Countries like Israel offer useful models. To replicate their success, Cyprus needs to strengthen:
1. Access to infrastructure, tools, and know-how
2. Startup funding mechanisms
3. Support structures for entrepreneurs
4. Digital transformation—especially in government and national infrastructure
What Came Out of the President’s US Trip
The President’s trip to the US was built around these priorities. It included meetings not just with tech companies, but also with venture capital firms, accelerators, and top academic institutions like Columbia Business School and Stanford University. The aim was clear: connect with all parts of the innovation ecosystem.
One of the biggest highlights? A potential partnership with Plug and Play, one of the world’s largest startup accelerators. The company, which has helped launch unicorns like PayPal, Dropbox, and Pinterest, expressed interest in setting up operations in Cyprus. Within three months, we’ll know more about the scale and nature of its presence—possibly even a regional innovation hub.
This could give Cyprus’ startups direct access to investor networks, experts, and international peers—making our ecosystem stronger and more connected.
Big Tech Shows Interest
High-level meetings were also held with tech giants like OpenAI, Nvidia, Amazon, Google, Oracle, Microsoft, and ServiceNow. These discussions focused on:
- Digital skills training, both for public sector employees and the general population, particularly in AI. (OpenAI, for instance, is already a partner in Estonia’s new AI education program.)
- AI-driven solutions for major challenges like wildfire prevention and traffic management—developed in collaboration with Cyprus-based institutions.
- New infrastructure opportunities, such as energy-efficient data centers and satellite communication systems to boost national security and digital autonomy.
Amazon and Nvidia even explored the possibility of establishing research and development centers in Cyprus. Company reps will be visiting the island soon to explore these options further.
Another major vote of confidence came from the CEO of TensTorrent, a leading AI processor firm. The company is exploring the idea of launching operations in Cyprus, which could mean access to cutting-edge computing systems and deeper integration of research, business, and innovation on the island.
Partnerships in Academia
Talks with Columbia Business School also showed promise, with next steps underway to explore a possible presence in Cyprus. The goal: import the American model of university-driven innovation and entrepreneurship to strengthen Cyprus’ academic and research environment.
Cyprus as a “Sandbox” for Innovation
As the country redefines its national AI strategy—and joins “Pharos,” one of Europe’s first six AI Factories—it’s also positioning itself as a testing ground for emerging tech. Cyprus’ small size and agility make it ideal for piloting new technologies before they hit the broader, highly regulated European market.
This “sandbox” model is already being used in fintech, but there’s growing interest in applying it to energy innovation, a sector facing similar global challenges.
And Beyond the US: India’s Growing Interest
Cyprus’ efforts to attract tech investment aren’t limited to the US. India—a rising global force in AI—is also showing strong interest. Several Indian companies are now exploring Cyprus as a gateway to the European market, and new announcements are expected soon.
**Deputy Minister of Research, Innovation and Digital Policy
**This article was translated from its Greek original
