Sri Lanka’s AI Push Faces Risk amid Budget Constraints

Sri Lanka’s ambition to establish Artificial Intelligence (AI) as a driver of national economic growth faces a major challenge due to insufficient funding in the Budget 2026. Only Rs. 3 billion has been allocated for AI development, national data platforms, and government-run data centres far below the estimated Rs. 20-40 billion needed for a single mid-scale data centre.

While the government has proposed additional incentives for foreign data-centre investors, including subsidized land, reduced electricity rates, and green-energy support, industry leaders warn these measures are inadequate. Experts highlight gaps in large-scale data infrastructure, high-performance computing, and skilled workforce availability.

Regulatory steps, such as the Personal Data Protection Amendment Act 2025 and upcoming Digital Economy Act, provide legal clarity, but experts caution that without robust infrastructure and investment, Sri Lanka risks missing the AI wave. Analysts emphasize urgent funding, talent development, and infrastructure creation to make AI a genuine national economic priority rather than a political slogan.

 

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