Despite the full-scale invasion and geopolitical chaos, Ukraine has been progressing in innovations, not just in military technology. The war has necessitated a complete restructuring of the economy. This growth can provide lessons for the rest of Europe. Sergey Tokarev, Co-founder and General Partner at Roosh, an investment group, shared insights on how Ukraine’s AI sector has grown.
According to Sergey Tokarev, Ukraine is well-poised to become a tech leader. Due to a relatively cheap workforce, and being outside strict digital EU regulations, Ukraine could reap the benefits of the AI revolution. The combined valuation of Ukrainian AI startups sits at around $16 billion as of July 2024. The brands include Grammarly, estimated at $13 billion in its most recent funding round, and Preply, a platform with over 35,000 tutors teaching over 50 languages in 180 countries.
In order to develop a robust AI ecosystem within the country, both private and public sectors joined forces. Tokarev mentioned that the private sector provided feedback to the Ministry of Digital Transformation of Ukraine about its recent AI regulation white paper. The paper aimed to set out a comprehensive account of Ukraine’s regulation strategies. As a result, it was seen by many tech professionals as falling somewhat short and receiving criticism. Sergey Tokarev underlies that such dialogue between public and private sectors is vital to provide difficult discussions and come out the better for it.
The investor notes that many AI and machine learning experts grew fivefold in just a decade due to STEM education and workforce development in Ukraine. These STEM degrees are greatly appreciated over time. Due to people for whom learning tech is second nature, Ukrainian companies have become more agile and innovative. Sergey Tokarev exemplifies Transimpex, a Ukrainian startup clearing land affected by armed conflict. It’s a prime example of a company whose use extends beyond active warfare. Transimpex, and similar dual-use technologies, are in a position to scale globally and assist not only Ukraine in the rebuilding process but also other countries decimated by war in the future.
Also, there have been debates about Europe’s AI economy’s state. Overall, Europe lags significantly behind the U.S. and the U.K. in the number of AI companies in major economies. Sergey Tokarev names a few well-known American companies that currently set the pace and terms of the global AI debates and conversations: OpenAI, Microsoft, Google, and Nvidia. He believes if this trend continues, the gulf between Europe and the rest of the world will grow at an exponential rate.
The Roosh co-founder adds that Ukraine ranks second in the number of AI companies among the Central and Eastern European countries despite the war. Since 2022, the country has faced appalling circumstances, which were genuinely incomprehensible for most European states and citizens. Yet, despite the ongoing brutality, Ukraine has grown a flourishing ecosystem built around a transformative technology—one that many European regulators still fail to understand.
