AI has the potential to contribute more than 1% annually to Türkiye's GDP, making it not a luxury but a necessity for the national economy, and these gains are poised to become key factors in boosting the country’s global competitiveness
One of the most transformative impacts of artificial intelligence in Türkiye is expected to be seen in public service delivery.
Enhancing platforms such as e-Government ("e-Devlet") and e-Pulse ("e-Nabız") with AI capabilities could generate annual savings of up to $5 billion, particularly in health care, taxation and regulatory oversight.
That is according to the 2025 Workshop Report by the Türkiye Artificial Intelligence Initiative (TRAI), which presents compelling insights into the current state and future potential of Türkiye's AI ecosystem.
Now in its eighth year, the workshop highlights Türkiye's position in the global AI race and the opportunities that lie ahead. Integrating AI into e-Government, e-Pulse and digital tax services could yield annual savings of between $4 billion and $5 billion, not just as a technological upgrade, but as a major leap in public resource efficiency.
E-Government is Türkiye's official online portal that provides citizens and residents with secure access to thousands of government services. E-Pulse, on the other hand, is a digital health platform developed by the Ministry of Health and allows users to manage and monitor their personal health data.
In 2024, services delivered through the e-Government Gateway reached record levels, with 11.5 billion transactions, up from 10.1 billion in 2023. This surge underscores the benefits of growing efficiency.
Efficiency, economic impact
AI has the potential to contribute 1%-2% annually to Türkiye's gross domestic product (GDP), making it not a luxury but a necessity for the national economy. These gains, driven by smart investments, are poised to become key factors in boosting the country’s global competitiveness.
Türkiye's AI ecosystem now includes 411 active startups, transforming what was once seen as potential into a tangible reality. The estimated total valuation of these ventures ranges between $2 billion and $4 billion, reflecting the sector's rapid growth.
One of the report's most striking findings is that AI could contribute roughly 1% annually to the national economy, translating into billions of dollars, particularly through savings in the public sector.
Opportunities, challenges
To fully realize this potential, the report identifies three critical areas for reform: revising public procurement systems, clarifying data-sharing models and establishing regulatory frameworks. Without these structural changes, the ecosystem's growth may be limited.
Another key insight from the report is the emergence of "Agentic AI,” autonomous systems capable of making and executing decisions without human intervention. These software architectures are expected to usher in a new era in business operations.
Türkiye is currently in the "early discovery” phase of this technology, which presents both opportunities and challenges. Becoming a leader in this field over the next three years will require swift and strategic planning.
Culture of co-creation
TRAI General Manager Can Sinemli emphasized the foundational mindset needed for ecosystem growth: "Adopting a culture of co-creation.”
This approach calls for alignment among all stakeholders, from startups and public institutions to academia and investors. The development of human capital and an increase in practical, implementation-focused projects are identified as the most critical components. Strengthening coordination and execution capacity is essential to turning potential into reality.
APY Ventures invested $4M in 8 startups in H1
Investment funds in Türkiye's startup ecosystem continue to play a vital role in helping new ventures grow and expand globally.
Highlighting the local impact on portfolio growth year over year, Mustafa Keçeli, managing partner at APY Ventures, emphasized that the rise in investments since 2023 reflects not only financial returns but also job creation and strategic sector development.
"As of today, APY Ventures contributes to the entrepreneurship ecosystem through eight funds. We manage both Albaraka's proprietary funds and those of our partners. To date, we’ve invested in 67 startups. In the first half of 2025 alone, we invested $4 million across eight companies," said Keçeli.
Goal of 37 new investments
Since its founding in 2019, APY Ventures has maintained a steady investment pace, and its 2025 targets are particularly noteworthy.
With plans to make 37 investments totaling $20 million this year, the fund is pursuing an aggressive yet sustainable growth strategy in emerging markets.
The fund's investment range of $250,000 to $2 million is well-suited to startups in the pre-seed, seed and Series A stages, offering optimal financing aligned with international standards.
Sector pioneer
APY Ventures stands out in projections that estimate Türkiye's venture capital market will reach $484.9 million in size by the end of 2025. With 186 venture capital funds active in the country, APY Ventures' management of eight distinct funds totaling TL 2.3 billion in assets reinforces its leadership position in the sector.
The firm's investment strategy spans financial technology, or fintech, enterprise software, cybersecurity, green energy and sustainability, agtech, healthtech, gaming and mobile applications, closely mirroring global trends.
Expectations of falling interest rates in 2025 are likely to reduce financing costs for venture capital funds, and APY Ventures' tech-focused approach is well-positioned to capitalize on this advantage.
Global success of portfolio companies
Circle Games secured a $7.25 million investment with participation from prestigious funds like Speedrun, led by BITKRAFT Ventures.
Milvus Robotics completed a $4.5 million funding round, backed by operational experience in over 15 countries.
Fimple reached a $12 million Series A investment through its operations based in Istanbul and London.
Fiber backbone initiative in TRNC marks strategic 'geotechnological' move
The digital age is defined not only by technology but also by sovereignty and regional power projection. Infrastructure is no longer just about a country's internal connectivity; it has become a strategic asset in international relations.
That is why the recent announcement of Türk Telekom's initiative to build a comprehensive fiber-optic backbone across the Turkish Republic of Northern Cyprus (TRNC) is more than a technical investment; it represents a bold geotechnological maneuver.
Where borders were once drawn with maps, today they are shaped by fiber cables. Those who build the digital backbone control the flow and direction of data.
This investment by one of Türkiye's leading telecoms and technology companies can be seen as a key component of the country's effort to transform its geopolitical strength into a geotechnological strategy.
By weaving the TRNC's digital infrastructure with high-speed fiber, Türkiye is not only enhancing local connectivity but also asserting its influence in the Eastern Mediterranean.
Data, energy, water
In today's geopolitical landscape, alliances and rivalries are increasingly defined by control over data, energy and water routes.
Türk Telekom's move has the potential to shape not only the TRNC's digital future but also the broader fate of the Eastern Mediterranean. The project will upgrade the TRNC's fiber-optic infrastructure, delivering high-speed internet to individuals and institutions alike.
Türk Telekom CEO Ümit Önal described the initiative as a form of "technology export," underscoring the company's vision to extend Türkiye's digital strength across the region.
From a historical perspective, digital sovereignty involves not only access to technology but also the capacity to develop and control it. Ownership of infrastructure means control over data flow and its security. The company's statement – "Our infrastructure is Türkiye's infrastructure" – highlights the strategic intent behind the project.
Treating fixed internet infrastructure as a public service and framing the concession process as a matter of "national responsibility" reflects Türk Telekom's dual role as both a commercial entity and a public mission carrier.
Path to digital independence
Similar patterns can be observed globally. China's digital infrastructure investments in Africa, led by companies like Huawei and ZTE, are part of its "Digital Silk Road" strategy, blending economic and strategic objectives.
A similar example is Starlink investments in Latin America. Elon Musk's satellite internet network provides connectivity to rural areas lacking infrastructure, while also serving as a tool for expanding American influence in the region.
This fiber expansion is especially critical in preparing for next-generation technologies like 5G. With 54% of 5G base stations already connected via fiber, Türkiye is effectively achieving its 2030 targets ahead of schedule.
For the TRNC, this project means more than just faster internet; it lays the foundation for digital public services, e-government platforms, online education and health care systems.
Moreover, it could catalyze the emergence of new sectors such as local entrepreneurship, digital tourism and fintech. As the TRNC becomes part of Türkiye's digital hinterland, it gains the potential to enhance its regional competitiveness.
Turkish software testing firm Virgosol secures $3.5M investment
Virgosol, a Türkiye-based software testing company, has secured a $3.5 million investment from Revo Capital, marking a significant milestone in its journey to become a global player in the rapidly expanding software testing market.
In 2023, the global software testing market reached a valuation of $51.8 billion, with projections expecting a 7% annual growth rate between 2024 and 2032. More specifically, the global automation testing segment hit $33.13 billion in 2024 and is expected to soar to $213.25 billion by 2037, growing at an annual rate of 15.4%.
These figures underscore the immense potential of the market Virgosol has entered.
The widespread adoption of DevOps and Agile methodologies has significantly increased demand for automation testing solutions. The integration of artificial intelligence into testing processes is accelerating execution and improving accuracy, now a key driver of market growth.
Virgosol's $3.5 million investment positions the company as a rising force in this space. For a Türkiye-based startup, this funding represents a substantial capital injection and a strategic opportunity to scale.
Aggressive global growth goal
Virgosol co-CEO Miraç Emektar emphasized the company's mission to expand Türkiye's presence in the global software market, highlighting its importance for national tech exports.
Revo Capital CEO Cenk Bayrakdar noted the global potential of Virgosol's AI-powered product RabbitQA, stating: "Solutions like RabbitQA are not only transformative for local markets but also have the potential to lead sectoral change globally."
Virgosol’s growth strategy includes doubling its international presence within two years, preparing for a Series B funding round by 2027 and setting new standards in global software quality.
With its AI-focused RabbitQA platform, Virgosol aims to compete with industry giants like IBM and Accenture. While the goal is ambitious, the sector's projected annual growth rate of 15-17% suggests that with the right strategy and execution, success could be well within reach.