Soheir El Sherbiny‏‏

The push to develop AI technologies gained significant momentum in late 2022, with the emergence of US-based ChatGPT, which uses generative AI technology. ChatGPT’s impressive ability to engage in conversations with people and professionally generate content has spurred Russia to embark on its own journey to develop AI technology. This comes at a time when Russia has been blocked from accessing Western technologies and critical computer components, including semiconductors, due to Western sanctions following Russia’s war on Ukraine since early 2022. Russian President Vladimir Putin has stated on many occasions that achieving "technological sovereignty" is important for Russia. Putin has made AI development a national security issue in light of the major challenges that Russia faces in this sector.Signs of InterestRussia has clearly demonstrated growing interest in AI technology in recent years, including with regard to:1. Increased number of Russian sectors adopt AI: According to the website Statista, the number of Russian economic sectors using AI technology expanded in 2021. The rate of AI adoption in the retail and wholesale sector was 14.4 percent, while AI use that year was around 13 percent in finance, 9.8 percent in information and communications, 9.6 percent in IT, and 9.1 percent in the international education sector. Construction, public administration, real estate, and culture and sports saw lower rates of AI adoption in 2021.2. Growth of AI market in Russia: The size of the AI market in Russia has grown over the last four years. In 2020, the market grew from 710 million USD to 1.62 billion by 2021, although it fell to 960 million in 2022 due to the effects of the Russian war on Ukraine and Western sanctions. However, it rose again to 1.68 billion USD in 2023.3. Expectations for continued AI market growth: Given extensive Russian governmental interest in stimulating the AI industry, the AI market in Russia is expected to expand to 2.13 billion USD in 2024, or around 16.08 percent annual growth. If Russian growth continues at this rate, it is expected that the market will reach 5.21 billion USD by 2030. However, this is a slow growth rate compared to the projected size of the US market, which is estimated to reach 106.5 billion USD in 2024.4. Increased economic impact of introducing AI technologies: According to Russian Prime Minister Mikhail Mishustin, Russia is among the world’s top three countries in developing digital technologies. Russia is working on developing its own AI models. The economic impact of introducing AI technologies in Russia is around a trillion rubles, or 11 billion USD. By 2030, this is expected to reach 10 trillion rubles, equivalent to 110 billion USD, which would add about 6 percent to the Russian GDP.5. Russia’s largest banking institution launches GigaChat: Sberbank is the largest state-controlled financial institution in Russia and has technological ambitions. In April 2023, it made headlines when it announced that it was launching an AI application for chatting called GigaChat. Although this is still in the testing stage, it is an indicator of growing Russian interest in AI innovation, especially generative AI. It is worth noting that the Kremlin tasked Sberbank with developing AI for the first time in 2019. Government support led to the launch of GigaChat, a chat robot with Russian language competencies as well as the ability to generate images.Government ApproachesRussia’s growing interest in AI sectors is primarily the product of governmental efforts to put Russia on the map of countries at the forefront of this industry. The main policies the Russian government has adopted in this field include:1. Kremlin paper on bolstering AI development and research: On 7 September 2023, Russian President Vladimir Putin issued a Kremlin paper outlining directives for strengthening AI development and research. This step came at a time when Russia was facing increasing Western competition over developing AI technologies. In the Kremlin paper, Putin gave instructions to the Russian government to take concrete steps to develop AI technologies, and particularly to support AI research. This included allocating annual funding from the federal budget to accelerate Russian research and development in the AI sector. The paper also highlighted specific areas of interest for AI research, especially the need to improve machine-learning algorithms, which are foundational to developing AI. It also shed light on the importance of establishing large language models like OpenAI’s ChatGPT. These models can revolutionize natural language processing and generation.2. Putin calls for state-owned companies to use AI technologies: In the Kremlin paper, Putin called on state-owned companies to speed up adoption of AI technologies in order to accelerate progress in the field of AI. &nbsp;He also encouraged the building of supercomputers in Russia. The government has promised incentives for local manufacturers to support building high-performance computing systems.3. A national strategy for AI development: In November 2023, during an AI conference held in Moscow, Putin announced his plan for a national strategy to develop AI as part of Russia’s goal of preventing a Western AI monopoly. He also indicated that it would be necessary to use Russian solutions to create "reliable and transparent artificial intelligence systems that are also safe for humans." Putin affirmed his rejection of the "monopolistic dominance of such foreign technology in Russia." His plan called for addressing challenges in expanding access to supercomputers, increasing the capacity of supercomputers with regard to size, and expanding the adoption of applied AI in major universities.4. Russia bans export of "Marker" combat robots: There is growing international interest in the Russian combat robot "Marker," an unmanned ground vehicle (UGV) that resembles a tank but has no central artillery. Russia is maintaining stringent policies that ban the export of this robot. According to Yevgeny Dudorov, CEO of the NPO Android Technology, which developed the Marker combat robots, Russia has received repeated requests from other countries to purchase Marker robots or to jointly produce them. However, Russia has insisted that it will not export these special robots. This keeps with its policy of not buying foreign technologies and preventing the sharing of its own technologies, in order to protect the technology used in the Marker robot.5. Testing military technology in conflict zones: Russia has long used the battlefield as a space to test new military technology. For example, the Russian army used the unmanned ground vehicle Uran-9 in Syria in 2018. However, practical experiments with this kind of technology could give Russia the opportunity to develop its technological capacities in this particular field.6. Expanding international partnerships in military technology: Russia is currently working to expand its international partnerships in military technology through streamlining interaction mechanisms with full support from the head of state. According to Aleksandr Mikheyev, executive director of Rosoboronexport, his company worked with 30 states in 2023, and signed contracts for Russian weapons sales worth more than 12 billion USD. &nbsp;7. Using AI in military data analysis and decision-making: The Russian Ministry of Defense has extensively utilized AI technology in its wars. AI has been used to support data analysis and decision making about soldiers on the battlefield. This is a trend that has recently grown, and the Ministry has adopted a strategy in which humans direct or oversee AI systems in order to ensure more rapid and effective responses during battle.Challenges AheadDespite Russian efforts to strengthen the state’s AI capabilities, Russia faces various obstacles to significant progress in this field compared to other rising powers. These challenges include the following:1. Reduced opportunities to access necessary computer capabilities: Since the Russian war on Ukraine in 2022, Russia has had fewer opportunities to access the necessary computer capabilities to train AI models. The US company NVIDIA announced that it would not sell its GPU systems to Russia. Other software companies with powerful computing services have followed suit, including Microsoft, Google, and Apple. Since these companies will cooperate more closely with the US, Russia will face major challenges with regard to accessing sufficiently expansive computing power and storing large sets of training data.2. Falling technological and scientific capabilities due to the war: Following the war on Ukraine, Russia’s technological and scientific capabilities have fallen due to the emigration of most leading Russian scientists to the US and Europe. According to a Kremlin official, around 100,000 IT specialists left Russia in 2022 alone, or about 10 percent of the country’s total workforce in the technology sector.3. Russia’s limited budget for AI research compared to the West: Given Russia’s huge budget deficit, its economic capacity to compete in the AI sector remains limited. The Kremlin recently allocated 5.2 billion rubles (equivalent to 57.247 million USD) for AI research in 2024. However, in 2022, the US government had allocated many times that amount, although this was seven times smaller than the amount that venture capital firms invested in 2022. Even if Russia could set aside similar levels of resources, this investment gap could mean that Russia falls further behind the West in this field.4. Russian private investment in technology is declining: In 2023, Russian private investment in technology fell significantly. Venture capital in this sector was only around 71 million USD that year, which was an 83 percent drop from the previous year, according to DSight, a business intelligence company based in Moscow.5. Security risks linked to AI: During Putin’s speech at the AI conference held in late 2023, he noted the potential security risks of encouraging AI in Russia. This is because large language models (LLMs) like ChatGPT are intended for a Western audience, and have been trained using Western data. According to Putin, this means that the models also are trained in Western values (i.e., regarding standards of behavior and public policy) which means that fully adopting these models instead of using a separate Russia model could pose a security threat.6. Russia lags behind West in AI innovation indices: According to a Stanford University report, Russia trailed behind the West in various indices of AI innovation in 2022. Russia produced only one machine learning system, whereas the US had produced 16, and the UK had produced 8. As of June 2023, Russia was believed to possess only seven of the world’s 500 most powerful supercomputers, compared to 150 in the US. Russia also ranked 38 of 193 countries in the consulting firm Oxford Insights’ most recent index on "government AI readiness," while the US ranked first.7. West and China outpace Russia in military AI: According to Katarzyna Zysk, professor of international relations at the Norwegian Institute for Defence Studies, Russia has made progress in the field of military AI, especially regarding drones. However, Western and even Chinese capabilities exceed Russia’s in the field of machine learning, which is central to general-purpose applications like ChatGPT. According to Zysk, the West and China largely rely on "fast-improving civilian AI to confer an economic and, ultimately, geopolitical . . . edge" over Russia. For its part, Russia is unlikely to achieve much progress on this front in light of the ongoing war and sanctions.In conclusion, Putin acknowledged the challenges that the AI industry in Russia is facing in his speech at the AI conference in November 2023. He announced Russian plans to overcome these challenges and to bolster the Russian state’s capabilities in this industry. However, the most significant obstacle that Russia faces is Western sanctions, which have prevented it from accessing the necessary chips for the massive computing power that AI requires. The ongoing sanctions are a major roadblock for Russia in utilizing advanced technologies. In order to catch up, Putin hopes to build Russian super-computing capabilities and expand the scope of training for AI professionals. He also plans to improve cooperation between BRICS countries in the field of AI in order to compete with leading Western powers in this growing industry.

What Drives Russia Interest in Developing AI Technologies?