Russia and its tech sector are largely absent from the global conversation about artificial intelligence, despite a historical track record of technological breakthroughs and a highly qualified workforce, Carnegie Politika economist Aleksei Kiselev argued in a commentary published on July 28.

The absence matters because it is not for lack of trying, or of individual success: Russian entrepreneurs have built genuinely competitive tech businesses over the past fifteen years, from online marketplaces to fintech. But Russia's most successful tech ventures now operate from outside Russia, while the domestic AI sector stays a niche, state-oriented backwater even as global capital pours into the field.

The talent that left

The most successful Russian-founded tech businesses today operate outside Russia. Nebius Group, set up by Yandex founder Arkady Volozh and based in the Netherlands, signed a multi-billion-dollar deal last year to supply AI computing power to Microsoft — a deal Kiselev argues would have been impossible for a Russia-based company, not only because of Western sanctions but because no global corporation wants to give Russian state agencies access to client data.

Digital bank Plata, founded by former Russian fintech guru Oleg Tinkoff, now in self-imposed exile, is expanding rapidly across Latin America and tells the same story: its founders use cutting-edge technology to assess credit risk and prevent fraud, but chose to build the business in the unfamiliar market of Mexico with a new regulatory regime over a domestic one where, as Kiselev puts it, governments and elites are not constrained by functioning institutions.

Stagnation at home

Inside Russia, the picture is stark. VK, operator of Russia's dominant social network, has lost more than 80% of its share value over five years despite state support and a lack of competition. Research and development spending as a share of GDP has barely moved since 2010. And Russia continues to score poorly on the Global Talent Competitiveness Index.

Russian AI projects such as Sberbank's GigaChat remain niche products built mainly for the domestic, and largely state, market, while ChatGPT and DeepSeek reshape the global economy elsewhere. Russia's stock market capitalisation-to-GDP ratio stood at 45% in 2020, against 80% in China and 195% in the United States — a proxy, Kiselev argues, for how thin the country's high-quality, inclusive economic development really is.

The state's own recent moves underline the gap rather than closing it: Russia only adopted its first law regulating artificial intelligence in late July, which IntelliNews reported amounted to an inadvertent admission that the country has next to nothing in the way of "sovereign AI" to regulate.

But despite the presence of a vibrant tech sector, Russians love their gadgets and use of smartphones and online services is prolific. The only problem is they are largely forced to buy foreign-made products.

Russian cloud GPU consumption surged 507% year-on-year in the first half of 2026, with the domestic AI software market reaching RUB25bn ($318mn) in 2025, as companies move from testing AI systems to deploying them in core business processes such as customer support, fraud prevention and computer vision. That points to real, accelerating adoption of AI tools by Russian businesses — just not to Russia building the underlying models or chips itself. Nvidia's A4000, a US-made card, remained the most widely used GPU among surveyed Russian companies, underscoring how dependent even this domestic usage boom is on foreign hardware routed around sanctions.

Institutions, not talent

The explanation Kiselev leans on is decades old. Loren Graham, an MIT historian of Russian science, argued back in 2016 — at a St Petersburg forum session literally titled "Technology Is a Ticket to Tomorrow: Adapt or Die" — that Russia has a long history of successfully developing new technologies but always fails at commercialising them: "You want the milk without the cow." Graham traced the failure to weak property rights, the absence of political competition and the lack of an independent legal system.

Kiselev draws a parallel with Iran, where sanctions in the 2010s initially spurred a tech boom and local analogues of Amazon and Uber, only for members of the elite to simply expropriate the businesses once they succeeded — killing off the commercial gains entrepreneurs had built, absent courts or state accountability to defend their rights.

"Regimes in which all the power is held by a small circle of people are destined for technological stagnation," Kiselev concludes. Without addressing Russia's underlying institutional weaknesses, he argues, the country's AI ambitions will remain a pipe dream regardless of how much compute or talent it can muster.