The development of 16 flagship Artificial Intelligence (AI) programmes by 2032, the establishment of new structures to support its use in the public sector and the economy, and the implementation of workforce upskilling programmes are among the key elements of Cyprus’ new national AI strategy, outlined on Wednesday by Deputy Minister of Research, Innovation and Digital Policy Nicodemos Damianou.
Speaking at the Digital Agenda Cyprus Summit, during a presentation entitled “On our own terms: Cyprus and AI, 2032”, the Deputy Minister said Cyprus does not aim to compete with major economies in developing large-scale AI technologies, but rather to leverage their capabilities in areas where they can generate the greatest added value for the country.
He explained that the strategy focuses on the adoption and practical application of AI, to increase productivity, improving public services and strengthening the economy’s competitiveness. “We don’t want to win the AI race. We want to capitalise on it,” he said.
According to the Deputy Minister, the ambition is for Cyprus to become a trusted European AI hub, where systems and services can be developed, tested and validated in accordance with the EU regulatory framework before being scaled into other markets.
Priority for the public sector and five economic sectors
Damianou said the new strategy identifies the public sector as a key priority for AI adoption, to address longstanding challenges and improve productivity.
It also identifies five economic sectors in which Cyprus has the necessary expertise and institutional capacity to accelerate AI adoption. These are financial services and financial technology (fintech), tourism and hospitality, shipping and maritime activities, healthcare, and legal and judicial services.
The strategy identifies 16 flagship programmes that will form the basis of transformational projects to be implemented by 2032.
For the public sector, key projects include upgrading the Digital Citizen application to Digital Citizen 2.0, incorporating AI capabilities, and developing Digital Company 2.0 to serve businesses.
The strategy also provides for the establishment of a dedicated Government AI Accelerator, which will be responsible for developing and delivering AI services across public administration. Plans also include a Government Innovation Hub and two industrial innovation hubs or centres of excellence, focusing on the development of specialised solutions.
Infrastructure, funding and business support
Referring to the infrastructure required, the Deputy Minister said the strategy rests on three main pillars: securing adequate computing capacity, establishing an intelligent government platform and modernising the country’s connectivity infrastructure.
The government platform will include infrastructure for connecting and utilising data from different public services, enabling the development of AI applications and interoperability with the private sector. The strategy also envisages upgrades to submarine cables and broader connectivity infrastructure.
Damianou also referred to three main funding mechanisms supporting the strategy, covering research, startups and scaleups, as well as the establishment of an AI sovereign investment matching fund.
He added that a national programme is planned to accelerate AI adoption among small and medium-sized enterprises (SMEs).
Human oversight in critical decisions
The Deputy Minister placed particular emphasis on ensuring that AI development remains human-centric, based on the principles of transparency, trust and effective oversight.
He said this approach is reflected in an “AI Social Contract”, under which technology should be used to make people more productive rather than replace them. In this context, he said every citizen should have the right to contest decisions made using AI systems in sensitive areas, such as healthcare and social benefits. He also stressed that no critical AI system should operate without human oversight.
Regarding technological sovereignty, he said Cyprus must retain control over critical infrastructure while leveraging international partnerships and, wherever possible, open-source models and platforms for the public sector.
“We should not confuse bureaucracy with digitisation”
Damianou returned to the need for broader changes in the functioning of the state during his participation in a panel discussion entitled “How AI is reshaping the relationship between citizens and the state”.
He said that tackling bureaucracy is often confused with digitising processes, although the two represent different challenges.
He explained that introducing digital tools alone is not enough to address structural problems, citing the employee evaluation and reward system as an example. He reiterated the need to change the strictly hierarchical model so that creative thinking, critical thinking, decision-making and adaptability are rewarded.
According to the Deputy Minister, tackling bureaucracy requires a comprehensive, whole-of-state effort rather than action by the Government alone. He acknowledged that obstacles continue to hinder the country’s progress, stressing the need for solutions and greater speed in policy planning and implementation.
Nevertheless, he said the new AI strategy creates the conditions for faster progress, provided emphasis is placed on the practical use of available technological tools.
He explained that priority should be given to empowering citizens, businesses and particularly SMEs to use existing AI applications to increase their productivity.
240,000 uses of new digital services in the first nine months
During his presentation, Damianou also reviewed progress in public sector digitisation. He said new digital services developed over approximately the past 18 months were used 240,000 times during the first nine months of 2026.
Examples included the new school management system, which contains 253,000 student and parent profiles, and the electronic justice system, through which 1.3 million court documents have been filed.
He also reported a 13% to 17% reduction in response times for digital social benefit services presented the previous month. Damianou further announced that three new features are scheduled to be added to the Digital Citizen application within the next three to four weeks, including an electronic ticketing feature for football matches.
Interest in ground station for European IRIS satellite network
Finally, Damianou referred to the opportunities arising from the development of the European IRIS secure satellite communications network.
He said the network will comprise 348 satellites, with deployment scheduled to begin in 2029.
He disclosed that Cyprus is exploring the possibility of becoming one of the European locations hosting a ground station for the network, highlighting the importance of such infrastructure.
He noted that combining high-resolution satellite data with AI applications could create new capabilities for protecting critical infrastructure, enhancing security and communications, and preventing natural disasters such as wildfires.
Concluding, he said the rapid pace of technological advancement makes it essential for Cyprus to prepare in good time, with the new national AI strategy aimed at establishing the conditions needed to harness these capabilities for the benefit of the economy and society.
