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Cyprus's cabinet on Tuesday adopted the National Strategy for Artificial Intelligence 2026-2032. The plan sets out to lift the share of Cypriot businesses using AI from 9.3 per cent in 2025 to 75 per cent by 2032. The Cyprus AI strategy also commits to producing at least 3,000 specialised AI professionals, through 12 flagship programmes whose funding has not yet been fixed. Nicodemos Damianou, Deputy Minister of Research, Innovation and Digital Policy, offered a conditional upside. In that scenario, productivity rises by as much as 15 per cent and GDP by as much as 12 per cent by 2032, but only if the required investment and measures actually happen. That condition carries most of the weight, because the money and the detail are still to be agreed with ministries.
We do not seek to compete with the largest international ecosystems in scale.
Nicodemos Damianou, Deputy Minister of Research, Innovation and Digital Policy
Key takeaways
- The adoption target: Cyprus wants 75 per cent of its businesses using AI by 2032, up from 9.3 per cent in 2025.
- Talent goal: The National Strategy for Artificial Intelligence 2026-2032 aims to develop no fewer than 3,000 specialised AI professionals.
- Growth is conditional: Nicodemos Damianou described a scenario of up to 15 per cent higher productivity and up to 12 per cent higher GDP by 2032. He said it depends on investment and measures being delivered.
- Funding still open: Details, priorities and funding sources for the 12 flagship programmes will be settled later, through a three-year rolling action plan.
- Skills pilot: In its pilot phase, FutureAI CY, a scheme built on micro-credentials, is intended to train 1,000 workers.
Table of contents
An Eightfold Jump With the Money Left for Later
The headline goal asks Cyprus to move from fewer than one business in ten using AI to three in four. Measured against the 2025 baseline of 9.3 per cent, the 75 per cent target for 2032 amounts to roughly an eightfold rise in adoption. Damianou presented the gains to productivity and GDP as a scenario rather than a forecast. In his account they depend on the necessary investment and measures being carried out.
The plan rests on 12 flagship programmes due for delivery by 2032. What each one contains, which comes first and who pays for it have not been decided. Those choices will be worked out with the relevant ministries and public bodies. The vehicle is an action plan that rolls forward on a three-year cycle.
The strategy grew out of recommendations from the National Specialised Committee on Artificial Intelligence, chaired by Chief Scientist Demetris Skourides. A public consultation also fed into it. Damianou set the plan inside the government's social liberal ideological and political framework. He described that framework as seeking a competitive economy alongside a modern, effective state that acts responsibly toward society.
Why Cyprus Is Chasing a Niche Rather Than Scale
By 2032, Damianou said, the government's central aim is that Cyprus will be the Eastern Mediterranean's leading AI hub. The pitch is a trusted European jurisdiction where AI solutions are built, tested and scaled. It also casts Cyprus as a bridge between the EU and neighbouring regions. That is a goal the government has set for itself, not a position the island holds today.
"We do not seek to compete with the largest international ecosystems in scale," Damianou said. The plan instead directs AI toward the uses expected to return the most value to the country.
First on the list is the public sector, where the goals are to raise productivity, cut red tape and speed up administrative procedures. After it come five areas in which, according to Damianou, the island can already draw on established know-how: maritime transport and shipping, legal services, FinTech and financial services, hospitality and tourism, and health.
The government also wants Cyprus to serve as a regional centre for AI education and training. It plans to lean on universities, research institutions and training bodies to draw in talent and leading international institutions.
Skills Measured by Learning, Not by Usage
Schoolchildren aged six to 18 will follow a national AI literacy programme split into four age groups, run by the Education Ministry. Damianou said success would be judged on whether skills develop and learning outcomes improve. Counting how often pupils use AI tools will not be the yardstick. That is a more demanding test than a usage figure, and a more honest one.
Adults get two tracks. Civil servants will receive dedicated training, and retraining courses will be shaped around particular professions. The flagship is FutureAI CY, a micro-credentials programme. A micro-credential is a short certificate in a narrowly defined skill. During its pilot phase, the scheme is meant to reach 1,000 workers.
A National AI Skills Observatory will track labour market demand and technological change, and its findings are meant to steer what training is offered. The 1,000-worker pilot should not be confused with the 3,000-specialist goal. One counts people trained in a first phase. The other counts specialised professionals developed by 2032.
Research Sandboxes and Computing Power for the State
Five research fields are singled out in the strategy: next-generation wireless networks; health and the life sciences; space, defence and security technologies; autonomous systems; and energy together with the environment. Specialised sandboxes are planned for each one. Here a sandbox means a controlled space in which new AI applications can be developed, tested and evaluated before they are rolled out more widely.
Money is also pledged for computing infrastructure. Ministries and public bodies will receive technical and operational support aimed at bringing AI into public administration faster. This ties back to the public sector's place at the head of the priority list.
Damianou was clear that the targets will not meet themselves. He said both public and private sectors must commit clear investment and implement the plan effectively. Progress will be assessed and measures adjusted as results come in. No budget figure was attached to the approval, so the investment on which the GDP scenario depends remains unquantified.
| Measure | Starting point | Goal | Deadline or condition |
|---|---|---|---|
| Businesses using AI | 9.3% (2025) | 75% | 2032 |
| Specialised AI professionals | Not stated | At least 3,000 | 2032 |
| National productivity | Not stated | Up to +15% | 2032, if investments made |
| GDP | Not stated | Up to +12% | 2032, if investments made |
| FutureAI CY trainees | Pilot | 1,000 workers | Pilot phase |
| Flagship programmes | Approved | 12 | By 2032 |
What could help or hold back the plan
The case for
- Five named priority sectors and five research fields give the 12 programmes a defined scope, rather than spreading effort thinly.
- A three-year rolling action plan lets ministries adjust priorities as results come in, which Damianou said is intended.
- The schools programme measures learning outcomes rather than tool usage, which gives a sturdier view of skills progress.
The case against
- Funding sources for all 12 flagship programmes are still undecided, so delivery timelines cannot yet be judged.
- Moving from 9.3 per cent to 75 per cent business adoption depends heavily on private firms, which the government cannot direct.
- The productivity and GDP gains are explicitly conditional on investments that have not been quantified.
What to be careful about
- The 12 flagship programmes have no confirmed funding, leaving the 2032 targets exposed if budgets fall short in later rolling plans.
- The 75 per cent adoption target relies on private-sector take-up, which Damianou acknowledged requires investment from businesses as well as government.
- The FutureAI CY pilot covers 1,000 workers; scaling beyond the pilot has no stated size or timetable.
The bottom line
Cyprus has set itself a clear scoreboard: 75 per cent business AI use and at least 3,000 specialists by 2032, starting from 9.3 per cent adoption in 2025. The approach is deliberately narrow. It puts the public sector first, then five sectors where Damianou says the island already has expertise, plus five research fields served by sandboxes. What remains open is the part that decides outcomes. Funding and priorities for the 12 flagship programmes await the three-year rolling action plan. The 15 per cent productivity and 12 per cent GDP gains hinge on investment nobody has yet quantified. Until budgets are attached, the plan is better read as a direction set by the cabinet than as a commitment already paid for.
What to watch
- Watch for the first three-year rolling action plan, which is meant to fix the details, priorities and funding of the 12 flagship programmes; no date has been set.
- Watch for the launch of the FutureAI CY pilot and whether it reaches its goal of 1,000 trained workers; no start date has been announced.
- By 2032 the strategy's main tests fall due: 75 per cent business AI use and at least 3,000 specialised AI professionals.
Frequently asked questions
How many Cypriot businesses used AI in 2025?
The strategy puts business AI use in Cyprus at 9.3 per cent in 2025. The goal is 75 per cent by 2032.
Who drew up Cyprus's national AI strategy?
It was based on recommendations from the National Specialised Committee on Artificial Intelligence, chaired by Chief Scientist Demetris Skourides. A public consultation also fed into it before the cabinet approved it.
Will the AI strategy raise Cyprus's GDP by 12 per cent?
Not automatically. Nicodemos Damianou described up to 12 per cent higher GDP and up to 15 per cent higher productivity by 2032 as a scenario. He said it depends on the necessary investments and measures being carried out.
Which industries does Cyprus's AI plan prioritise?
Five sectors come next after the public sector: health, legal services, maritime transport and shipping, FinTech and financial services, and hospitality and tourism.
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