AI Crossroads: Sri Lanka’s high-stakes leap into the Machine Age
View(s):Sri Lanka is at a critical juncture in its smart nation development trajectory while the world has been moving at “breakneck speed” in the Artificial intelligence or AI race, as of February 2026,
Sri Lanka has a highly competent workforce, but only a 6.2 per cent AI adoption rate, which is far lower than the global average, AI Data Scientist A.D. Magedaragamage told the Sunday Times Business.
AI is no longer a technology trend but the very foundation of geopolitical and economic power in the 21st century.
AI is now disrupting the world order, creating new leaders, upsetting medium powers, and laying bare the weaknesses of poor countries just as electricity and the internet did before it, he added.
Investigative reports and global indices paint a sobering picture of Sri Lanka’s readiness. The current position of the country is 82 out of 83 in the Global AI Index regarding AI-ready talent and infrastructure.
According to the AI Diffusion Report 2025 published by the Microsoft AI Economy Institute, the adoption rate of AI in Sri Lanka was around 6.2 per cent in early 2025, which slightly increased to 6.6 per cent by the end of 2025, which is significantly lower than the global average.
The most critical holdups include lack of infrastructure, insufficient cloud infrastructure and energy costs make it unaffordable to pursue cutting-edge AI applications.
However, even after the launch of a comprehensive National AI Strategy (2024-2028), the ecosystem in Sri Lanka is “caught at a model level”.
The “Brain Drain”: The ongoing economic recovery has seen a flight of senior AI engineering and strategic talent, leaving a “know-how” gap in scaling local innovations.
Despite the existence of a Personal Data Protection Act, the country’s open data portal has remained unused, depriving local developers of the quality data needed to train ethical and localised models.
In order to survive this global change and prevent itself from being reduced to an importer of AI, he suggested that Sri Lanka should make the transition from policy intention to rapid implementation within the next 12 to 18 months.
The government should implement AI projects in areas that have a high impact but are low risk and can help build public confidence. Examples of such projects include AI-powered content management for the 59 per cent of outdated ministry websites or translation tools in Sinhala and Tamil languages.
Instead of limiting AI literacy to technology hubs, it is necessary to extend AI literacy to regional hubs like Jaffna, Kandy, and Matara in 2026. This will aid in training 100,000 teachers and executing AI “bootcamps” for SMEs.
The government needs to implement the budgetary allocation of Rs. 30 billion for 2026 to support Digital Public Infrastructure (DPI). It is necessary to develop tax incentives for the private sector to invest in specialised AI hardware and data centres that are backed by renewable energy to make it easier for start-ups in the country.
To attract hyper-scale investors, Sri Lanka has to move beyond “draft” policies. Establishing a Digital Economy Authority by mid-2026 will provide the legal clarity required for responsible AI testing and deployment, he said.
Sri Lanka’s survival depends on whether it can channel its technical base into measurable productivity. Failure to act now risks a decade of technological dependence.
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