"A global competition on who wins in AI, as it is fast becoming, creates risks of a race-to-the-bottom in terms of safety and ethics – and if you are watching the narrative carefully, it is pointing in the direction of dominance; it seems that some confuse leadership with dominance," Deputy Minister of Research, Innovation and Digital Policy Nicodemos Damianou has suggested.
Going on to underline the importance for smaller states, like Cyprus, in particular to invest in AI infrasturcture, the Deputy Mnister was addressing a session on 'Artificial Intelligence: Challenges, Opportunities and Best Practices for Parliaments of Small States,' within the 18th Conference of Presidents of Parliaments of Small European States taking place in Nicosia on 15 and 16 September.
Continuing his comment, Damianou noted, "Last year, the discussion was about the incredible potential of AI and what we could do to manage the risks. It was also about whether AGI will be coming. A year later, it became about who gets there first; who invests more money in AI infrastructure and not about whether AGI is coming, but when AGI and ASI are coming; some pointing to the next 2–3 years."
"This global race in AI, where geopolitical tensions push countries and companies to prioritise speed and dominance over safety, ethics and inclusiveness, is being described as a 'silent technological war', one that will define the balance of power in the decades ahead. Global leaders have already framed AI not merely as a tool, but as a matter of strategic infrastructure, competitiveness, and economic resilience. Investments in high-performance computing, large-scale data infrastructure, and advanced research are shaping the geopolitical map. The amount of funding that go into AI is unprecedented. Never before in history have we seen such levels of funding centred around a single theme, a single technology," the Deputy Minister went on to say.
Accordingto Damianou, "For Europe, the answer cannot be limited to regulation alone – and I will revert to the regulatory part shortly. Alongside the AI Act, Europe must also invest decisively through initiatives such as the AI Factories and the upcoming AI Gigafactories, which provide not only the computational power and high-performance computing infrastructure needed for advanced AI, but also access to large datasets, training resources, and innovation ecosystems where startups, researchers, and businesses can experiment and scale solutions."
The Deputy Minister then went on to underline, "For small states, this context is perhaps even more critical. We may lack the scale of larger economies, but through strategic choices, smart investments, and regional collaboration, we can ensure that our voices are heard and that our citizens are not left behind in the new AI-driven world order."
Damianou's full address can be seen below:
It is both an honour and a privilege to welcome you to Cyprus for the annual meeting of Presidents of Parliaments of Small European States. This gathering and this session, in particular, is timely and reflects the importance of cooperation among our countries, especially across disciplines that affect our societies, our economies, and not only regional, but global geopolitics.
We come together at a time defined by rapid technological change, driven by the remarkable advancements in emerging technologies with the most profound being Artificial Intelligence (AI). As a force that is already transforming industries, economies, societies, and governance across the globe, AI presents both extraordinary opportunities and substantial challenges that no country – large or small – can afford to ignore or can face alone.
AI is often described as a general-purpose technology, much like the steam engine and electricity after that, with a broader impact than that of personal computers and the Internet; in fact, some are already talking about moving from the 4th to a 5th industrial revolution – from the Intelligence Age to the Human-Machine Symbiosis Age. AI is developing at an unprecedented pace, with a potential annual economic contribution of Generative AI alone estimated by experts in the vicinity of $2.6 to $4.4 trillion globally. What once took decades to unfold in earlier industrial revolutions is happening today in a matter of years, or even months. In fact, things are changing almost weekly; the extraordinary rise of Generative AI since late 2022 has marked a turning point in the evolution of artificial intelligence, while the emergence of agentic AI – capable of autonomously taking actions to achieve goals – promises to further transform industries, decision-making, and the very way humans interact with technology. And it is pointing to what some call Artificial General Intelligence (AGI) or even Artificial Super Intelligence (ASI). Systems that could equal human cognitive abilities across all domains and not just specific verticals, or which would surpass human intelligence altogether.
A global competition on who wins in AI, as it is fast becoming, creates risks of a race-to-the-bottom in terms of safety and ethics – and if you are watching the narrative carefully, it is pointing in the direction of dominance; it seems that some confuse leadership with dominance. Last year, the discussion was about the incredible potential of AI and what we could do to manage the risks. It was also about whether AGI will be coming. A year later, it became about who gets there first; who invests more money in AI infrastructure and not about whether AGI is coming, but when AGI and ASI are coming; some pointing to the next 2–3 years.
This global race in AI, where geopolitical tensions push countries and companies to prioritise speed and dominance over safety, ethics and inclusiveness, is being described as a “silent technological war”, one that will define the balance of power in the decades ahead. Global leaders have already framed AI not merely as a tool, but as a matter of strategic infrastructure, competitiveness, and economic resilience. Investments in high-performance computing, large-scale data infrastructure, and advanced research are shaping the geopolitical map. The amount of funding that go into AI is unprecedented. Never before in history have we seen such levels of funding centred around a single theme, a single technology.
For Europe, the answer cannot be limited to regulation alone – and I will revert to the regulatory part shortly. Alongside the AI Act, Europe must also invest decisively through initiatives such as the AI Factories and the upcoming AI Gigafactories, which provide not only the computational power and high-performance computing infrastructure needed for advanced AI, but also access to large datasets, training resources, and innovation ecosystems where startups, researchers, and businesses can experiment and scale solutions.
For small states, this context is perhaps even more critical. We may lack the scale of larger economies, but through strategic choices, smart investments, and regional collaboration, we can ensure that our voices are heard and that our citizens are not left behind in the new AI-driven world order.
At the same time, for Europe, and potentially more so for smaller states, the debate on AI becomes inseparable from the broader question of Digital Sovereignty and makes this more pressing than ever before. In a world where control over data, computing power, and skills is increasingly becoming foundational for any economy and yet seems to be concentrated in the hands of a few global players, ensuring that Europe – and each of its member states – can act autonomously and independently in the digital sphere is a strategic necessity. As an island member state at the south-eastern periphery of the Union, Cyprus is acutely aware of the importance of autonomy in digital connectivity and resilience.
Digital Sovereignty does not mean isolation; collaboration in this fast-moving technological world is also needed; AI can be above all, a powerful tool for good. It has the potential to not only enable industries and economies, but to tackle some of the world’s biggest problems. Diagnose diseases earlier and accelerate the discovery of new medicines; optimise energy use, predict natural disasters, and make farming more sustainable. Improve disaster response and help address social inequalities. By analysing huge amounts of data, AI offers the opportunity to create a healthier, more sustainable, and more equitable world.
At the same time, many of the risks – however unknown as to where the technology will be in 3- or 5-years’ time – are evident today and must be managed with decisiveness and care. These include the potential erosion of human oversight, the concentration of unprecedented power in the hands of a few actors, and ethical dilemmas that challenge the very foundations of democracy, accountability, and human dignity. Algorithms, if not properly designed, may replicate or even amplify existing biases, leading to outcomes that are neither fair nor equitable. The emergence of deepfakes and the spread of misinformation challenge our integrity and can gradually erode public trust in institutions and democratic processes. And these do not take into account the risks that we will have to face when AI becomes autonomous – remember AGI and ASI. These should all be considerations when applying AI in Parliaments as well.
This is why governance is not just important, but absolutely critical in the case of AI. Without proper governance, we risk outcomes that undermine public trust, distort democratic debate, and concentrate power in ways incompatible with our values. As policymakers, we therefore have a dual responsibility: to create frameworks that allow innovation to flourish and, at the same time, to safeguard citizens, democratic institutions, and fundamental rights.
In that respect, and to pave the way for innovation in trustworthy AI, the European Union (EU) has introduced the AI Act, with the purpose of ensuring that AI systems used in the EU are safe, transparent, ethical, and respect fundamental rights. This reflects a path distinct from that of other global players. In the United States, the development of AI has largely been left to market dynamics and private sector innovation, while in China, it has been driven by state-led interventions focused on control over data, strategic dominance, and mass deployment. Europe, by contrast, has chosen a values-based approach that positions Europe as a global standard-setter for responsible AI. At the same time, as I said before, we must make sure that it does not inhibit our innovation capacity.
At country level, ensuring that all citizens have the opportunity to participate in the digital era is not only a matter of fairness, but also a strategic imperative for resilience and growth. The same with job displacement, which calls for sustained investment in education, re-skilling, and workforce adaptation.
At national level, and aiming to drive broad adoption of AI across both government and industry, the Cyprus Government established in January 2025 a National AI Taskforce, a multidisciplinary body of experts from academia and the private sector, mandated to develop a comprehensive, action-oriented strategy to harness AI for the transformation of public services and the wider economy.
High-quality data, skilled talent, and effective financing are essential to scale AI while keeping it ethical and aligned with European standards. Cyprus is investing in this direction: we support digital transformation across enterprises and are designing targeted programmes to drive AI adoption in the private sector, in tandem with innovation and research ecosystems.
Equally important is creating the right conditions for investment and innovation. Capitalising on its geostrategic location, Cyprus is well positioned as the eastern outpost of Europe to serve as a regional hub for technological innovation and a sandbox for AI experimentation and deployment. Initiatives such as the European Commission’s AI Continent Action Plan are central to this vision, bringing together research institutions, start-ups, industry, and public-sector stakeholders to accelerate the development and adoption of AI technologies.
We are proceeding to join the Greek-led Pharos AI Factory, gaining access to advanced computing, datasets, training, and innovation support, and exploring participation in the AI Gigafactory initiative to expand collaboration and capacity.
A central priority remains the adoption of AI in the public sector, combining infrastructure modernisation with active engagement of start-ups, businesses, and research organisations. To accelerate this, we have launched funding programmes inviting the private and innovation sectors to deliver AI solutions to real challenges faced by government.
Dear friends,
Just as governments must rethink how they design and deliver policies in the age of AI, so too must parliaments redefine their role. As the guardians of democracy and accountability, they should also act in ways that ensure legislation keeps pace with technological change.
AI can strengthen parliamentary work, supporting research and analysis, identifying trends in large volumes of data, ensuring coherence in lawmaking, and assessing the impact of legislation. Properly used, AI is not just a tool of efficiency but an enabler of more transparent, evidence-based, and responsive lawmaking.
In fact, we are already seeing examples of integrating AI in parliamentary work. The European Parliament has piloted AI-based automated multilingual services of translation and transcription to make debates and documents more accessible; these tools are already available for use by any member state. The Parliament of Estonia has explored Gen AI chatbots to help citizens navigate parliamentary data. Others are experimenting or already deploying AI tools to assist in the drafting of bills, automating various tasks such as the identification of legal documents and the summarisation of committee amendments or to analyse and classify the large volumes to documents and data produced.
At the same time, parliaments, of course, have a decisive role in shaping the ethical and legal frameworks that govern AI itself. Building capacity, through investment in digital literacy and dedicated parliamentary units on AI and other emerging technologies, could be important.
Excellencies,
AI is too powerful and too fast-moving for any one country to face alone. We must ensure that its benefits are shared fairly, not captured by only a handful of actors. Above all, we must safeguard the human dimension, ensuring that AI strengthens rather than undermines democracy; complements rather than replace humans. For small states, collaboration and the exchange of best practices can be a true force multiplier; those who win under the new era are those who will apply the technology in the best possible way and for the good of societies and economies alike.
Allow me to conclude with this thought: as small states, we may not control the global tide of technological change, but we can steer our course upon it. Size is not a limitation – it is an opportunity, if guided by foresight, strategy, and cooperation.
