Artificial intelligence plays a crucial role in shaping modern-day diplomacy but requires collaboration and cooperation with regional and global actors, some experts have suggested.

Nepal’s AI diplomacy is crucial to harnessing AI’s potential while minimising risks, according to recent findings. By implementing their policy recommendations, Nepal can carefully navigate the global AI landscape, promote its national interests, and foster sustainable growth in the digital age, a research report released on Thursday states.

The Centre for Social Innovation and Foreign Policy (CSIF) had conducted research on “Artificial Intelligence and Diplomacy: A Case for Nepal’s AI Diplomacy”.

Artificial intelligence (AI) presents both opportunities and challenges for developing countries like Nepal, CSIF says. Its research focuses on AI diplomacy for Nepal, particularly vis-a-vis its immediate neighbours India and China. “Nepal must balance innovation with regulation to maximise benefits and mitigate disruptive impacts.”

This requires collaboration and cooperation with regional and global actors through bilateral and multilateral mechanisms, the organisation said.

There is a geopolitical rivalry between the United States and China on AI, said the report. “The US and China are striving for AI supremacy, making it difficult for countries to choose between their systems, so Nepal must navigate this competition strategically.”

The CSIF took interviews and consultations with GP Acharya (AI academic), Anil Kumar Dutta (joint-secretary at the Ministry of Communication and Information Technology), Dinesh Khanal of the ministry, Suvanga Parajuli of the Ministry of Foreign Affairs, Sambridh Ghimire (electoral strategist), Tarun Kumar Jha (IT director, Nepal Rastra Bank), Rajib Subba (cyber security expert), Anandraj Khanal (expert), Madhu Raman Acharya (former foreign secretary and ambassador), Bikas Gurung (president, Robotics Association of Nepal), Sandip Karki (Nepal Police), Yagya Raj Pandeya (assistant professor, Department of AI and Engineering, Kathmandu University), Sixit Bhatta (IT entrepreneur), Sameer Kharel (AI academician) and Arjun Karki (former ambassador), among others.

The experts point to the evolving global AI policy landscape through ethical guidelines, regulatory frameworks, and national AI strategies, stressing that Nepal needs a regulatory framework that reflects international best practices and addresses local needs.

AI-driven cyberattacks pose an unprecedented security challenge for Nepal, given its evolving digital landscape. Inconsistent data protection standards and foreign AI dependence increase vulnerability, they said. Nepal’s AI development faces challenges such as a dearth of skilled human capital, data, and digital infrastructure.

“At the same time, Nepal’s hydro-powered clean energy potential, strategic location, and a growing understanding and willingness to adopt ICT/AI offer opportunities for AI’s development. The government is in the nascent stage of AI policy formulation, but the efforts lack clarity on implementation plans and international cooperation. MoFA’s role in bridging Nepal’s AI landscape with the rest of the world remains extremely limited,” said the report.

AI diplomacy involves addressing AI’s impact on geopolitics, making it a prominent item on diplomatic agendas, and using AI as a practical tool in diplomatic activities, according to the report. Nepal’s effort to improve its AI capabilities rests heavily on robust AI diplomacy, it said, asking the government to formulate a national AI strategy spelling out the priorities.

Some of the recommendations are formulating a well-defined national AI strategy suited to Nepal’s development goals; identifying key sectors where AI can have the greatest positive impact—such as education, health, agriculture, climate change, disaster risk reduction, and cultural heritage preservation; and outlining clear goals and objectives for AI adoption and development, and addressing ethical considerations and potential societal impacts.

The experts also suggested investing in Nepal’s digital literacy and AI talent development. Prioritise education and training in STEM fields, data science, and AI-related skills to build a domestic talent pool; strengthen university programmes in AI and related disciplines; support vocational training to equip workers with AI skills; promote digital literacy; and create opportunities for AI experts to contribute to Nepal’s AI ecosystem, they ask the authorities.

The experts also call for promotion of international cooperation and knowledge-sharing, establishment of a robust AI governance framework, strengthening of cyber security and data protection measures, attracting foreign investment and positioning Nepal as an AI Hub, and increasing Nepal’s diplomatic heft for AI governance.