Silicon Persia: Iran’s AI Aspirations and the Global Tech Order

Author: Silvia Boltuc

Executive Summary

This report examines Iran’s strategic advancements in artificial intelligence (AI), as President Pezeshkian has reaffirmed his administration’s commitment to advancing this sector. The Iranian government has committed $115 million to AI research and aims to position itself as a regional leader in this field.

At the Iran Corridor 2025 conference in the UAE on 3 February 2025, Iran proposed AI partnerships with Persian Gulf states, leveraging its expertise alongside regional investment and infrastructure. On 15 March 2025, Iran unveiled a prototype of its national AI platform, with a stable version expected within a year.

Key Points

1. Iran has committed $115 million to AI research and unveiled a national AI platform prototype, aiming to become a regional leader in AI, despite facing sanctions and infrastructure challenges.

2. The country seeks AI partnerships with Gulf states, leveraging its expertise and human capital to build regional collaborations while countering Western technological dominance.

3. Iran’s AI advancements, including military applications such as AI-powered drones and missile guidance, signal a strategic shift toward next-generation warfare capabilities in the region.

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Background Information

In July 2024, the Iranian government established the National AI Organisation as an independent body under the President’s supervision. This initiative reflects Iran’s ambition to become one of the top 10 AI leaders globally within the next decade.

The country’s growing AI ecosystem is supported by a strong academic foundation, with leading universities such as Sharif University of Technology, the University of Tehran, and Amirkabir University of Technology (and others) actively contributing to AI research and education. By 2023, Iran ranked second in the region in terms of the number and quality of AI-related scientific publications, highlighting the increasing focus on AI development at the national level.

On 3 February 2025, the United Arab Emirates hosted the Iran Corridor 2025 conference in Dubai, a key event showcasing Tehran’s advancements in telecommunication technology and digital innovation. The conference explored opportunities for regional co-investment in intercontinental digital infrastructure, including geo-distributed data centres, Digital Free Zones, and Internet Exchange Points (IXPs). Iranian officials emphasised the nation’s resilience in developing its FinTech ecosystem despite ongoing economic sanctions.

Iran has also witnessed a surge in AI-focused start-ups, integrating AI across diverse industries such as healthcare, security, e-commerce, and agriculture. With Iran ranking second in the region for AI developers and fourth for the number of AI firms, its role as a regional AI hub continues to expand.

To further support AI innovation, Iran has committed $115 million to AI research and development at the beginning of 2025. Additionally, the 15 March 2025, the country unveiled a prototype of its national AI platform and is planning to establish its first dedicated AI park in Tehran within the next two years, marking another step toward strengthening its AI infrastructure. These developments illustrate the Islamic Republic’s strategic intent to leverage AI as a driver of technological progress and economic growth, despite facing external constraints.

Geopolitical Implications of Iran’s AI Development

Despite facing severe international sanctions and infrastructural limitations, Iran is actively fostering a self-reliant AI ecosystem, leveraging its substantial human capital and strategic positioning within the region.

One of the primary drivers behind Tehran’s AI ambitions is the necessity to develop indigenous platforms that operate independently from Western-controlled systems. International sanctions have historically constrained the country’s access to global technology markets, prompting the country to invest in domestic innovation.

This drive toward technological sovereignty is evident in Iran’s National Information Network (NIN), an isolated internet infrastructure designed to sustain operations even when disconnected from the global web. Such measures ensure continuity in AI research and implementation, particularly in military and strategic domains.

Iran’s human capital remains a crucial asset in its AI development. With a highly educated workforce, particularly in STEM fields and competitive labour costs, the Middle Eastern country positions itself as a valuable player in regional AI collaboration.

Recognising this, Tehran has proposed strategic AI partnerships with neighbouring Persian Gulf states, seeking to merge Iranian expertise with the financial and infrastructural capabilities of its regional counterparts. Initiatives such as AI acceleration hubs, joint investments in free zones, and academic cooperation programs aim to integrate Iran more deeply into the regional technology landscape, mitigating the effects of international isolation.

However, Iran’s AI expansion is not without controversy. Key institutions driving AI research, such as Sharif University of Technology, are under international sanctions because of their close ties with the Ministry of Defence. The Western world harbours concern over Iran’s technological advancements.

Iran’s history of cyber warfare further underscores its asymmetric approach to technological competition. Following the 2007 Stuxnet attack, which exposed vulnerabilities in its nuclear program, Iran significantly expanded its cyber capabilities. This early-adopter mindset has translated into substantial investments in AI-driven military applications.

In 2025 alone, Iran allocated $115 million to AI research, integrated AI into its naval fleet with an advanced data-processing warship and announced the deployment of 1,000 AI-enhanced combat drones. Additionally, AI-powered missile guidance systems are being implemented, focusing particularly on strengthening electronic warfare units stationed in the strategic port of Jask on the Gulf of Oman. The country is also testing autonomous combat robots, signalling a shift toward next-generation warfare strategies, which will fill the gap with countries such as the US, which possess more advanced equipment.

Despite these advancements, Tehran’s AI trajectory faces structural hurdles. The rapid development of sophisticated AI technologies may exceed its current capabilities. Furthermore, external pressures, such as continued sanctions and restrictions imposed by global tech giants—exemplified by Apple’s 2017 ban on Iranian applications—continue to hinder Iran’s integration into the global AI landscape.

Ultimately, Iran’s AI ambitions reflect a broader geopolitical strategy: to counterbalance Western technological dominance, strengthen regional alliances, and bolster its asymmetric military capabilities. Whether Tehran can overcome its limitations and emerge as a formidable AI power remains uncertain. However, its ongoing investments and strategic manoeuvres indicate a clear intention to position itself at the forefront of AI-driven geopolitical transformations in the Middle East and beyond.

Challenges Facing Iran’s AI Sector

The development of Islamic Republic’s AI sector is shaped by a unique set of structural and economic challenges. While Iran has a strong talent pool and a growing domestic AI ecosystem, investment risks and infrastructural limitations present significant hurdles. Unlike in developed nations where private companies such as Google, NVIDIA, and Alibaba have driven AI infrastructure expansion through large-scale investments, Iran’s economic instability and sanctions have deterred substantial private-sector participation.

A key constraint is the lack of robust AI infrastructure across multiple dimensions, including high-speed data networks, computing power, storage capabilities, foundational AI models, and software frameworks. The absence of well-developed data centres and cloud computing services further complicates large-scale AI implementation. Additionally, international sanctions restrict Iran’s access to cutting-edge AI models, global databases, and essential hardware components such as advanced GPUs and high-performance storage chips. These constraints limit both research capabilities and commercial AI deployment.

Financial constraints are another critical challenge, particularly for small and medium-sized enterprises (SMEs), which struggle to allocate resources toward AI development amid broader economic difficulties. Given these financial limitations, some experts have suggested state-supported AI service providers and aggregators as viable solutions. AI operators could provide the necessary computational infrastructure and cloud services, enabling businesses to access AI capabilities without requiring costly hardware investments. AI aggregators, in turn, would integrate services from multiple operators, streamlining access to AI tools and reducing operational costs.

The fragmentation and lack of coordination in Iran’s AI ecosystem further impede progress. Dispersed and unaligned AI and IT service providers contribute to inefficiencies, while slow and inconsistent internet infrastructure affects AI deployment and data exchange. Unlike leading AI nations such as the United States and China—where foundational AI models are developed by major tech firms with substantial government support—Iran’s AI sector lacks centralised, large-scale development efforts, making it more challenging to compete at an international level.

Despite these obstacles, Tehran continues to explore innovative approaches to advancing its AI sector. Government-backed initiatives and localised AI solutions have the potential to mitigate some of these challenges, fostering a more sustainable AI ecosystem. By addressing infrastructural gaps and implementing strategic policies, Iran can enhance its AI capabilities and further integrate itself into the regional and global AI landscape.

Conclusion

In conclusion, Tehran’s strategic investments in AI reflect its ambition to become a regional leader in this field despite facing economic sanctions and infrastructure challenges. By fostering regional partnerships and leveraging its human capital, Iran is positioning itself as a key player in the Middle East’s digital future.

However, its AI-driven military advancements raise concerns about shifting regional power dynamics. Stakeholders should closely monitor Iran’s AI trajectory, as it holds significant implications for regional security, economic growth, and geopolitical alignment.