🤖 AI Disruption Pressures Sri Lanka’s IT Export Model 📈

Sri Lanka’s ICT and BPM export model faces pressure from rapid AI advancements, lowering client valuations for coding and back-office services despite strong recent export performance, according to Frontier Research. • Overall Figures & Sector Performance: ICT/BPM exports rose 11.31% YoY to US$ 150.49 Mn in June, outperforming the overall services export growth of 3.75%. • Risks & Disruption: Cheaper AI-generated code threatens traditional, labor-intensive outsourcing models. This impacts Sri Lanka's path toward achieving its US$ 5 Bn technology export target. • New Channels & Opportunities: • The government's proposed AI data centre initiative seeks to create a new foreign exchange channel by serving local and regional customers. • AI-augmented capital could help offset medium- to long-term economic growth constraints caused by an aging workforce and falling birth rates. • Global Context: US AI compute output is estimated to outpace China by 21–49 times in 2026. The shift highlights growing global policy focus on computing capacity and semiconductor supply chains.