Can AI unlock Pakistan's next trillion-rupee opportunity?

Technology has always been a lightning rod for debate: skepticism, potential, efficiency. Or even demonization.

These were reactions to the printing press and now centuries later the latest iteration of Artificial Intelligence (AI) faces the same. This generation of generative AI has caught everyone’s attention because of its speed, accessibility and data, including the Government of Pakistan.

Earlier this June, Pakistan published a draft National Data Governance Policy that proposes a regulatory framework for AI - a slow but essential step towards creating its infrastructure as the National AI Policy was introduced approximately a year ago.

Densight Labs, an applied AI firm and consultancy to companies like L’Oreal and Aga Khan University Hospital, released its policy paper claiming that its recommendations mixed with the necessary investment can help unlock a PKR 9.7 trillion digital transformation opportunity.

Its CEO Numan Ahmad describes what success in Pakistan’s AI ecosystem would look like: “A Pakistani professional in any sector( healthcare, finance, logistics, FMCG) can pick up an AI tool and deploy it into their actual workflow without needing a technical co-founder to hold their hand.”

“That’s the shift from awareness to adoption.”

Gaps in the system

While Pakistan’s government may be saying all the right things, it still has a ways to go.
While open-source technologies are democratizing access to AI, one of the main concerns for developing countries is whether it has the capabilities for implementing it.

Ahmad echoes this concern referring to his company’s experience: “we kept running into the same wall: the individual capability was there after training, but the organizational and regulatory environment hadn’t moved. The commercial work we were doing kept exposing structural gaps that no amount of consulting could fix from below.”

Ahmad contests that the country needs rules that provide clarity without freezing innovation.

“Specifically, I think Pakistan needs three things urgently: a data protection framework that actually works, sectoral guidelines for high-stakes AI use in healthcare and financial services, and government procurement rules that allow public institutions to engage with AI vendors without the current legal ambiguity.”

He claims the importance of understanding how AI is actually being deployed and avoiding the instinct to regulate AI in the abstract.

“Regulation written by people who’ve never seen AI used in a Pakistani enterprise ends up either toothless or paralyzing.”

Resistance to change

Another obstacle is the mindset of Pakistan’s business leaders. Ahmad talks about three misconceptions: “First: ‘AI is an IT problem.’ It’s not. It’s a business process problem. The CTO can’t deploy AI if the CFO doesn’t know what to measure, if the HR director is afraid of what it will do to headcount, and if the CEO hasn’t decided what the organization is actually trying to achieve with it.

Second: ‘We’ll wait until it’s more mature.’ The organizations waiting for AI to ‘settle down’ are watching their more decisive competitors move.

Third: ‘Our people aren’t ready.’ This one is almost always wrong. Pakistani professionals, when given structured exposure to real tools in real contexts, adapt faster than most. ‘

Ahmad is right. Pakistani are already demonstrating how AI is tackling local challenges. Earlier this year, Lahore University of Management Sciences secured a Gates Foundation grant to launch Pakistan’s first National AI Hub with a focus on maternal healthcare. Currently, it is working on Awaaz-e-Sehat—“Voice of Health” in Urdu—a voice-assisted app designed specifically for frontline health workers that is currently in its pilot phase of development.

The World Bank argues that so-called “small AI” - targeted applications designed to solve specific local problems, can provide fast and tangible impact with minimal resources. It claims that small AI can “leapfrog” traditional barriers and begin realizing the benefits of AI today.

Jobs Slashed

One of the biggest concerns of AI is the jobs it will replace. However, Ahmad believes there will be a net positive.

“AI doesn’t just create or eliminate jobs, it transforms them,” Ahmad says. “Pakistan has a young, adaptable workforce. If the education and training infrastructure moves fast enough, the new jobs are reachable.”

In fact, the World Bank claims that AI related job vacancies have doubled in Pakistan while also highlighting how this technology is accelerating brain drain. That the Middle East’s AI market is currently worth several billion dollars coupled with the fact that it houses the largest Pakistani diaspora is a cause for concern.

Ahmad, chooses a more positive outlook: “The more useful question is: how do we create enough high-value, well-paying AI roles inside Pakistan that the opportunity cost of leaving goes up?
We need organizations here that are actually deploying AI seriously, so that the best practitioners have somewhere worth staying.”

AI before basic education?

With the lack of digital infrastructure and lack of education being a pressing issue in the country, critics argue whether AI is taking the focus away from basic education. Ahmad thinks otherwise, “Mobile banking in Pakistan reached people who’d never had a bank account. WhatsApp is used daily by people who struggle to read. AI will find its way into the informal economy faster than formal institutions expect.”

Perhaps AI should be viewed as an an educational aid rather than a distraction from education instead. In a district of Rajasthan, Indian 10th grade government school students registered a 96.4 per cent increase in pass rates after creating an AI platform called PadhaiwithAI. The platform helped solve textbook math problems in English or Hindi or even create worksheets for teachers.

Ahmad says: “The real question is: who shapes how AI enters Pakistan? I’d rather we be in the room helping shape how it lands.”

Bridging the gap

Most of Pakistan has no internet. This is one of the many challenges that Pakistan must address to for AI’s capabilities to be realized in the long-term. However, it has the potential to unlock opportunities for trade, jobs, higher living standards and even economic transformation.

“AI is the most significant equalizer in professional history because it compresses the gap between access to knowledge and access to formal institutions,” Ahmad claims.“A first-generation professional in Multan with good judgment and the right AI tools can now produce work that competes with someone who went through an elite university and a tier-one firm.”
He talks about the need for deliberate design like training programs, pricing structures, language accessibility, that make AI capability reachable for people who aren’t already connected to elite networks.
“ That’s not charity; it’s tapping into the majority of Pakistan’s actual talent. The best practitioners we’ve trained have come from exactly those backgrounds.”

AI undoubtedly has enormous potential. But how much for Pakistan will depend on how many barriers the Pakistani government removes, the level of investment it provides and the right regulatory support.