By Contributor,Ismail Aslandag,Nish Acharya
Copyright forbes
Every startup these days seems to have a product or service built with artificial intelligence. And yet, there are also signs that early-stage investments in AI startups might be plateauing as the industry struggles to define the applications of AI, and startups struggle with use cases that customers want enough to create a scalable business model. The same problem is happening to countries that are launching national AI strategies. The hope was that AI, as a new technology unveiling itself to the entire world at the same time, and built on information technology systems, would be the great equalizer. Bangladeshi engineers could learn AI, for example, and build upon Open AI systems at the same time as their American counterparts.
As with most new technologies, that turned out not to be entirely correct. While AI might become a great equalizer, the sheer volume of investors looking for AI deals has priced many startups out of the market. Even new startups that score higher in AI search rankings than the market leaders struggle because they haven’t raised a billion dollars. Beyond the high barriers to entry for new startups, the current AI market leaders have so much capital that they are directly responsible for significant revenue at large companies like Oracle and Nvidia. It’s a vicious cycle threatening to throttle innovation and leave out everyone except the United States and India.
The global AI infrastructure market that is estimated to reach $200 billion in annual spending in 2028. The United Arab Emirates expects to be a global leader in this space. Earlier this year, they made a commitment of $10 billion to artificial intelligence – most of which will go to construction of data centers. Public private investment funds like G42 and Khazna are building the data centers and subsidizing local manufacturing facilities for powerhouses like Nvidia and Huawei. What’s been missing is locally developed technology and startups capable of competing worldwide in AI, quantum computing or other emerging technologies.
ANKARA, TURKIYE – MAY 28: A mobile phone displays the logo of OpenAI’s artificial intelligence assistant ChatGPT, with another digital screen displaying the United Arab Emirates map in the background in Ankara, Turkiye on May 28, 2025. (Photo by Ismail Aslandag/Anadolu via Getty Images)
Anadolu via Getty Images
“If we are to truly expand access to global commerce, we need to create an inclusive digital infrastructure that allows businesses and customers to engage in cross-border commerce. That includes reducing barriers to merchants to enter new markets and customers to access truly global set of products.”
Vinod Sivagnanam is a senior technology and digital transformation leader with a strong track record in global commerce, payments, and operational strategy. At Adobe, he leads AI-driven initiatives to modernize digital storefronts and commerce at scale. During his tenure at Amazon, he spearheaded international expansion efforts, launching retail operations in established and emerging markets, and optimizing customer experiences through data-driven experimentation, competitive analysis, and localization strategies.
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The outlook in emerging markets is also unclear. In 2023, for example, Argentina announced a major push to become an AI “superpower”. It was able get some investments, such as a $500 commitment from Salesforce, but little else. The government did not set up research programs or find ways to keep home grown scientists’ home to work on useful projects.
According to the Chicago-based Paulson Institute, more than 40% of top-tier AI talent in the world comprises foreign nationals working in a different country. AI researchers from Nigeria to India to Brazil, have been recruited to the US and Europe, where funding, infrastructure, and career opportunities vastly outpace those at home. The U.S. is far and away the leading destination, followed by China and the U.K. Mid- and low-income countries are large contributors to this brain drain, studies show.
According to Sivagnanam, “nations need to invest, through the private sector, in tools that enable faster market entry and operational scalability for local, innovative product strategies. They need to simplify complex processes to match their capabilities and help local startups to adapt more quickly to changing market conditions worldwide – such as US tariffs.”
Vinod S works on e-commerce solutions throughout the world
Vinod Sivagnanam
Emerging market initiatives may have a lifeline in China. Huawei, which has been locked out of the United States and other Western markets, has instead focused on emerging markets. With support from the Chinese government, Huawei has helped Algeria build a government data center, and managed cloud services in Philippines, Egypt, Nigeria and other initiatives in Nicaragua, Nepal, and Pakistan. In addition to business services, Huawei is funding programs at local universities to train local talent that it can then hire.
The next 18 months will go far to determine how concentrated or equitable the AI industry becomes. Startups outside the United States will struggle with financing – particularly later stage financing. And data centers may become limited access due to national security concerns and nationalist politics. Lastly, the court case against Microsoft and Open AI by the New York Times may go far to supporting creators but may limit access to content by smaller AI startups. These factors may lead us to major changes in the business model for AI – or nothing at all.
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