Armenia’s $500 million AI center raises security and sovereignty concerns

In the modern era of rapidly developing digital technologies, improving cybersecurity systems has become a top priority for national governments. Along with its pivotal role in driving the post-industrial economy, emerging IT technologies also present a dangerous tool for external influence.

In this context, the dominance of leading nations in the IT sector poses significant challenges to the digital sovereignty of developing countries. The diminishing power of the United States and its allies, amid the rise of new economic powers — particularly China and India — is pushing Western nations to seek new mechanisms to maintain global leadership. This often involves engagement with so-called “peripheral” countries in the Global South, including nations in the Middle East, Africa, the South Caucasus, Central Asia and Latin America.

One country in this complex geopolitical landscape is Armenia, whose economy is closely tied to Russia, making it difficult for the U.S. and Europe to exert external influence. Despite Prime Minister Nikol Pashinyan’s stated goal of European integration, it is unlikely that the South Caucasus republic can sever its extensive ties with Russia without significant consequences.

From January to October 2025, Armenia’s trade turnover with Russia amounted to $5.72 billion, representing 35% of the republic’s total foreign trade operations ($16.5 billion). Russia ranks among Armenia’s top five trading partners, alongside China, the United Arab Emirates, Iran and Germany. Additionally, Armenia imports 88% of its gas from Russia.

While losing to Moscow in traditional economic spheres, the West may be preparing an asymmetric response in areas where Russian influence is limited, such as information technology. In July 2025, representatives from the Armenian business group Team Group, American tech giant NVIDIA and Armenian-American startup Firebird.ai, announced plans to build a $500 million data center in Hradzan, near Vanadzor, the administrative center of Armenia’s Kotayk province. The center, equipped with thousands of NVIDIA Blackwell graphics processing units (GPUs) and capable of scaling up to 100 megawatts, is intended to be the most powerful in the region and is scheduled to launch in 2026. 

Although the project aims to transform Armenia into a global artificial intelligence hub and create thousands of jobs, in reality, it poses a potential threat to the republic’s digital security and national sovereignty. It is known that the local infrastructure for the center will be provided by Team Telecom Armenia and Ireland’s Imagine Broadband, while servers will be supplied by the American company Dell.

According to Bloomberg, only 20% of the center’s computing resources will be used by Armenia, while 80% is reserved for American companies. The center will therefore operate primarily in the interests of other nations.

Forbes writes that the United States maintains strategic influence in Yerevan through the business community and control over microchip exports. To bolster its position in Armenia’s high-tech economy, the U.S. government approved the use of NVIDIA chips in the data center.

As an American company, NVIDIA is subject to U.S. law, including the controversial CLOUD Act. Passed in 2018, the act allows U.S. law enforcement agencies to compel American IT corporations via a warrant or subpoena to provide requested data, regardless of the server’s physical location — whether in the U.S. or abroad. This raises the risk of potential data leaks or compromises of confidential information belonging to both ordinary Armenian users and government employees. The center’s dependence on NVIDIA chips will also make the system vulnerable to potential pressure from the White House, including through sanctions. One only needs to recall how the U.S. blocked chip supplies to China.

Without robust guarantees on data protection and transparency, the initiative could create a new dependence on external powers — similar to Armenia’s current economic reliance on Russia — and leave Armenia vulnerable to foreign control over a critical sector of its national security.