Artificial intelligence is rapidly transforming warfare, giving militaries new ways to gather intelligence, make faster decisions, and deploy autonomous systems.
This transformation is unfolding largely out of public view. While international organizations warn about ethical and legal risks, major powers continue to invest and experiment. The result is a new kind of arms race—one driven not only by weapons, but by algorithms.
For Armenia, the stakes are particularly high. Surrounded by heavily armed neighbors yet emerging as a regional technology hub, the country finds itself at a crossroads where innovation and security are becoming inseparable.
Rebuilding After 2020
In the aftermath of the 2020 War, Armenia embarked on an ambitious effort to rethink its defense strategy, shifting toward long-term structural transformation. Central to this shift is the Army Transformation Concept for 2025–2035, published in November 2024, which outlines a roadmap for professionalizing the armed forces and adapting them to the realities of modern, high-tech warfare—with the benefit of AI to collect and process data—and to make real-time decisions that impact outcomes.
The concept envisions a transition from a largely conscription-based, Soviet-inherited model to a more professional, flexible, and technologically advanced military. It includes expanding contract service, strengthening the non-commissioned officer corps, and modernizing command, control, and digital systems, while also seeking to better integrate Armenia’s scientific and technological potential into the defense sector.
At the same time, Armenia has diversified its defense partnerships. While the government handles agreements with discretion, reports indicate that as of 2025, Armenia signed contracts worth around $1.5 billion with India and more than $250 million with France.
Analyzing Options
In interviews with two civilian defense and security analysts—one in Armenia and the other in the United States, it becomes clear that Armenia’s military future depends on perspective—whether the tactical benefits of AI-powered weapons inform strategic war planning or the other way around.
In Armenia, Dr. Eduard Abrahamyan is a Senior Fellow at the Institute for Security Analysis (ISA), a research institute established in 2023 in Yerevan. It focuses on national security, defense reform, regional affairs, and hybrid threats to provide analysis and support a stronger Armenian defense sector. He notes that AI systems can analyze vast amounts of data—from satellite imagery to battlefield sensors—and very quickly provide optimal courses of action to commanders at the tactical and operational levels who are engaged in immediate combat.
“For small states, this creates an interesting paradox,” he says. “On the one hand, they cannot compete with the resources of major powers, but on the other hand, new technologies make it possible to change the rules of the game—by increasing precision, automation, and rapid response. In other words, AI can provide small states with tools of ‘smart power’ that partially compensate for material limitations and can even ensure a military-political advantage over larger states with greater military-technical capabilities.”
AI and emerging technologies can help narrow capability gaps, particularly in areas such as intelligence, unmanned systems, cyber defense, and precision strikes. At the same time, their effectiveness depends on how well they are integrated into broader military strategy and institutions.
“Major powers are also investing in the same technologies and often scale them faster. The real question is not simply whether a state possesses technology, but how effectively it can integrate it into its strategy, governance, and military doctrine. What kind of ideological foundation underpins national mobilization, resilience, the collective will and motivation to sustain a long-term wartime posture,” Dr. Abrahamyan argues.
In Washington, D.C., Sevan Araz works as a defense innovation professional. In his view, technological advances are most effective when combined with strong military fundamentals—trained personnel, doctrine, logistics, and strategic planning. He notes that, in the short term, armed forces around the world will experiment with and benefit from artificial intelligence. Yet, in Armenia’s case, only a coherent national security strategy can prevent it from falling behind.
Araz explains: “The risk is that AI becomes a ‘shiny object,’ diverting attention from foundational prerequisites that actually determine battlefield outcomes. Armenia can benefit most by first framing its security and policy discourse on the core building blocks of national defense.”
Value and Vulnerability
While AI-powered unmanned systems, sensor networks, high-precision air and missile capabilities, and rapid data analysis can strengthen Armenia’s defense capabilities, it can also create a certain deterrence effect. Dr. Abrahamyan notes, “The adversary knows that its actions are more likely to be detected and targeted—even before aggressive intentions are put into practice. Nonetheless, the same technologies also increase vulnerability, as warfare is increasingly shifting into cyberspace and data infrastructures. If a state lacks data protection, cybersecurity, technological autonomy, and strong counterintelligence capabilities, these same systems can become a source of vulnerability,” he says.
The real question is not simply whether a state possesses technology, but how effectively it can integrate it into its strategy, governance and military doctrine.
Next Steps
Both Dr. Abrahamyan and Sevan Araz concur that data infrastructure, research centers, a development strategy and a clear vision of Armenia’s role and place in the AI-driven world—as well as civil-military cooperation—are the building blocks of Armenia’s long term institutionalized policy.
Araz elaborates that Armenia needs to focus on rebuilding the underlying architecture of defense—doctrine, training, and reserves—without which AI-enabled systems will underperform. Preparation and scenario-building are equally critical. “In an era of surveillance and AI, adversaries largely understand each other’s capabilities; advantage comes from experimentation and the ability to impose multiple, unpredictable scenarios on the battlefield to overwhelm your opponent.” He points to the 44-day 2020 War as an important lesson in the need for continuous adaptation and preparedness in the face of evolving technologies.
New Allies
According to The Times of India, Armenia has become one of the largest importers of Indian defense products alongside the U.S. and France, acquiring missiles, artillery systems, rocket launchers, radars, protective equipment, night-vision devices, and ammunition. Armenia is the first foreign buyer of India’s Akash surface-to-air missile system. Deliveries of Pinaka rocket systems have begun. A February 2026 visit by India’s Chief of Defense Staff to Armenia focused on expanding cooperation in education, professional training, joint exercises, and experience exchange. While both Yerevan and New Delhi openly acknowledge their growing defense ties since the 2020 War, the specific scope and volume of acquisitions remain largely undisclosed.
With France, Armenia signed weapons supply contracts worth over €274 million in 2023–2024, according to a report presented by the French Ministry of Armed Forces to the French Parliament. The report notes that, as part of a broader effort to diversify defense cooperation, Armenia sought French support to strengthen its military capabilities and ensure national security. As reported by credible sources, Armenia has procured three GM-200 radars from France, 50 Bastion armored vehicles, 36 Caesar 155-mm self-propelled artillery systems, and various small arms and equipment. During a high-level meeting in Paris in late March 2026, Armenian Defense Minister Suren Papikyan and France’s Minister for the Armed Forces and Veterans Catherine Vautrin, emphasized the strong level of existing cooperation and its future potential. The discussions covered military-technical cooperation, military education, professional retraining, and advisory support.
Armenia has long held important security relations with Iran, which serves as a key transit route for some military supplies and has consistently supported Armenia’s territorial integrity.
U.S. VP Vance emphasized the strategic significance: “For the first time we are announcing a major sale of military technology…These capabilities will help Armenia defend its country and support lasting peace.
NATO Support
Armenia’s defense reforms are also supported by NATO, focusing on military education and broader modernization. Through its Defense Education Enhancement Program (DEEP), NATO has assessed Armenia’s military education system and is helping develop a new concept aligned with Western standards, covering doctrine, strategic leadership, and personnel management. In December 2025, NATO Deputy Secretary General Radmila Shekerinska visited Yerevan, meeting senior officials and emphasizing cooperation on modernizing the armed forces, strengthening governance, and advancing military education. These partnerships reflect a broader strategic effort to reduce reliance on a single security provider and build a more balanced, multi-vector defense policy.
This transformation has been accompanied by a sharp rise in defense spending. Military expenditures increased steadily from approximately $608 million in 2021 to $1.69 billion in 2025, making defense the fastest-growing sector of Armenia’s state budget. Although the 2026 allocation is projected to decline to around $1.44 billion—a roughly 15% decrease—it remains significantly higher than in any year prior to 2024, underscoring the sustained priority given to national defense.
U.S. Partnership
In June 2025, Firebird, an AI cloud company, and the Armenian government—with support from NVIDIA, a leading U.S. technology company known for high-performance computing and AI hardware—announced their vision for building advanced AI infrastructure to accelerate technology innovation and establish the Caucasus region as an AI hub. Jensen Huang, founder and CEO of NVIDIA, highlighted the initiative’s significance: “AI factories are the infrastructure of the 21st century. Our collaboration with Armenia will help build foundational AI capacity and unlock new opportunities for innovation and economic growth across the region.”
Prime Minister Nikol Pashinyan also welcomed the project: “We welcome NVIDIA’s partnership and work with Firebird to build AI infrastructure in Armenia. This is a major step toward strengthening our tech sector and global partnerships. The government is happy to support this initiative and unlock new opportunities for our people and region,” he said.
This announcement set the stage for subsequent Armenia–U.S. cooperation. In August 2025, Armenia and the U.S. signed a landmark memorandum on AI and semiconductors, followed by U.S. Vice President JD Vance’s visit in February 2026. Key outcomes included Firebird’s plan to build an AI factory and data center, approval for high-performance NVIDIA chips, and the sale of $11 million in surveillance drones. U.S. VP Vance emphasized the strategic significance: “For the first time, we are announcing a major sale of military technology…These capabilities will help Armenia defend its country and support lasting peace.”
The Firebird supercomputing center is a 100-megawatt facility expected to come online in Q2 2026, marking Armenia’s entry into the high-end global compute economy. Its allocation structure is notable: 20 percent of capacity is reserved for Armenian entities, while 80 percent is contracted to U.S. firms operating in the region. According to The National Interest, a U.S.-based publication focused on defense and foreign policy, this reflects both commercial and geopolitical interests—linking Armenia to U.S. AI supply chains while also supporting local development. The project is further backed by broader cloud cooperation between Armenian entities and Amazon, aiming to position Armenia as a Western-oriented technology hub in the South Caucasus, at a time when it is recalibrating its relationship with Moscow.
Dr. Abrahamyan believes that deepening cooperation with the United States primarily means diversifying Armenia’s external security policy. “For small states, this is a critically important strategic principle—not to concentrate security reliance on a single partner.”
The combination of AI adoption, international collaboration, and structural reforms demonstrates a clear ambition: turning innovation into security in a region where both are indispensable.
