Tech experts urge focus on five-layer AI stack to boost IT sector in Pakistan

Tech experts have called for stronger promotion of the IT sector, urging a focus on a five-layer artificial intelligence (IT) stack spanning energy, chips, infrastructure, models and applications. Speaking to Business Recorder, Liaquat Ali, Founder of LA Consulting Corporation, said promoting the IT industry required moving up the five-layer AI stack. “Pakistan competes only at the applications layer today, the most exposed to automation. Target verticals are Islamic finance technology, South Asian agricultural technology, and Urdu-language AI. Export targets must be USD-denominated and tracked quarterly, ” he said. Pakistan’s IT sector export earnings crossed $4 billion mark for the first time during the first eleven months of FY2025-26. Moreover, Pakistani freelancers’ earnings hit $1 billion in foreign exchange during 11MFY26, underscoring their growing contribution to the national economy and strengthening Pakistan’s position in the global freelancing market. Ali was of the view that labour arbitrage, an economic practice of shifting work or business operations to lower-cost regions to reduce overall labour costs, had finished. “The protective strategy is a stack upgrade across all five layers. At the energy layer, technology parks need guaranteed power uptime in supply contracts. At the chips and infrastructure layers, Pakistan cannot buy its way in alone. Bilateral compute-access agreements with Saudi Arabia and the United Arab Emirates, where the Saudi Public Investment Fund’s Project Transcendence commits $100 billion to artificial intelligence infrastructure, are the realistic path. “At the models layer, Pakistan must own Urdu-Arabic language models, not license them. Special Technology Zones Authority amendments allowing USD-denominated foreign currency retention must pass within 12 months. ” Regarding India’s IT sector, Ali said the neighbouring country built a labour delivery industry on top of other people’s infrastructure, chips, and models. “When artificial intelligence automated that delivery, no proprietary layer existed underneath to survive on. Pakistan avoids that ending only by owning the models layer: foundation models trained on Urdu, Punjabi, Sindhi, and Pashto that no American or Chinese vendor will prioritise. “The Islamabad Artificial Intelligence Declaration of February 2026 frames sovereign AI as the national objective. Sovereign means model weights, training data, and inference infrastructure are Pakistani assets generating USD export revenue. ” Stressing the need for forming a five-year sustainable policy with incentives for data centers and software houses in Pakistan, he said: “Yes, but layer sequence is everything. The five-layer stack runs in order: energy first, then chips and infrastructure, then models, then applications”. According to Ali, a data center incentive package issued before the energy layer is resolved will produce empty facilities. “Pakistan’s grid cannot deliver the contractual uptime data centers require. Solve power for technology parks first, by act of Parliament, not ministerial notification. Then issue infrastructure incentives denominated in USD returns to attract foreign operators. The National Artificial Intelligence Policy 2025 allocates 30% of the Ignite research and development fund to AI. Parliament must lock that for five years. ” Ali emphasised that Pakistan should target 1% of gross domestic product (GDP) in technology research and development within five years. “At $452 billion, that is $4. 5 billion annually. Year one is achievable at $300 million by reallocating Ignite and Special Technology Zones Authority budgets with Gulf co-investment. Spending must cover all five layers, not just applications-layer coding bootcamps. Half of all disbursements must be industry-matched. The Pakistan AI Centers of Excellence framework targets 100, 000 to 150, 000 artificial intelligence-skilled graduates annually. Add USD-denominated retention incentives: stock options, foreign currency accounts, and tax relief, or the training budget funds a brain drain, ” he said. Meanwhile, Tahir Mahmood Chaudhry, Chief Executive, Falcon Engineering and President, Computer Society of Pakistan, said with IT exports surging past $4 billion and 600, 000 professionals in the pipeline, “Pakistan stands at a pivotal inflection point — but only bold policy, structural reform, and relentless innovation will determine whether the nation seizes its moment or squanders it”. “Pakistan’s information technology sector is no longer a footnote in the national economic narrative — it is rapidly becoming the headline. Broadband connectivity, the essential artery of a digital economy, has exploded from under two million connections to over five million — a transformation achieved in a compressed timeframe that even the severest critics cannot dismiss. “Yet statistics, however impressive, are merely a launchpad. Behind those figures lies a deeper strategic imperative: Pakistan commands a talent pool of 600, 000 technology professionals — a human resource dividend that, if intelligently leveraged, can propel us toward our national milestone of $10 billion in annual IT exports. The question before policymakers, industry leaders, and academia is not whether Pakistan possesses the raw material for digital leadership — it manifestly does. The question is whether we have the institutional will to transform potential into permanence, ” he said. Chaudhry said Pakistan’s digital identity on the global stage has been synonymous with freelancing — “a proud achievement, but an insufficient ambition”. “The next chapter demands a fundamental pivot from task-based work toward high-value software engineering, AI, and cloud-native architecture. These are not aspirational abstractions; they are the commercial realities already reshaping the $6 trillion global technology market. ” He said promotion without infrastructure, however, is rhetoric. “Three interventions are non-negotiable. First, seamless international payment gateways must be treated as critical national infrastructure — because a developer who cannot receive payment across borders is effectively locked out of the global economy. Second, domestic internet penetration must accelerate beyond urban centres, unlocking the immense untapped talent residing in Tier-2 and Tier-3 cities. Third, Pakistan’s technology diplomacy must intensify: government trade missions, bilateral digital trade agreements, and internationally positioned marketing of our engineering workforce must become standard instruments of statecraft — not afterthoughts. ” Chaudhry said a circulating narrative that India’s IT industry was in terminal decline was factually incorrect. “What India is experiencing — and what Pakistan must urgently study — is a structural evolution, not a collapse. The legacy business process outsourcing and low-cost data entry models that once defined the sub-continental IT identity are being automated away. That is not failure; that is disruption. The companies and nations that survive disruption are those that have already moved upstream. “ “Pakistan’s 19% year-on-year growth in technology exports is compelling evidence that global appetite for advanced engineering remains voracious. However, if our sector remains anchored to staff augmentation and commodity coding — if we are still selling developer hours rather than intellectual property — then automation will arrive at our doorstep just as surely as it did elsewhere. “The antidote is deliberate: Pakistan must engineer a pivot toward proprietary software-as-a-service products, owned IP, and advanced automation solutions. Our survival and prosperity depend not on the size of our workforce, but on the sophistication of what that workforce creates, ” he said. Chaudhry further said local universities graduate tens of thousands of computer science students annually. “That is the promising headline. The disconcerting subtext is that a substantial proportion of these graduates arrive at the labour market equipped for a technology landscape that no longer exists — trained for yesterday’s syntax, not tomorrow’s architecture. Closing this gap is not merely an educational reform priority; it is a national economic emergency. ” According to the tech expert, the path forward does not require an impossible blanket budget in a constrained fiscal environment — it requires surgical, strategic allocation. “Public investment must be channelled into three specific domains where global demand is both proven and growing: artificial intelligence, cybersecurity, and blockchain technology. University curricula, under the oversight of a strengthened National Technology Council, must be redesigned in genuine partnership with industry — not in isolation from it, ” Chaudhry maintained.

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