Public Budget Allocates 2% to AI, 500 Billion TL Private Commitment: Turkey’s New Tech Push

Turkey has launched a technology‑driven growth strategy by earmarking 2% of the public budget for AI projects under the 2026‑2030 Artificial Intelligence Action Plan.

Strategic Funding Allocation and Budget Impact

■2% of the public investment program (roughly 10 billion TRY) will be directly allocated to artificial intelligence initiatives.

■The plan sets a target to raise data‑center installed capacity to 1 GW, defining clear energy and infrastructure needs.

■A 500 billion TRY (approximately 10 billion USD) private‑sector investment goal is presented as a potential, not a binding, commitment.

■At least 60% of electricity for data‑center contracts must come from renewable or nuclear sources, adding an environmental filter to procurement.

Sectoral Dynamics and Investment Pull

■Regulatory sandbox zones will be created in 5 key sectors: finance, health, energy, mobility, and telecommunications.

■25% of projects completing sandbox programs are expected to scale via licensing or public procurement within 12 months.

■Only 7.5% of Turkish enterprises currently use AI tools; public procurement could accelerate adoption dramatically.

■Rising copper demand linked to AI hardware may keep prices above $6.70 per pound.

Regulation and Risk Framework

■Mirroring the EU AI Act, low‑risk applications will face simple checklists, while high‑risk systems require comprehensive algorithmic impact assessments.

■High‑impact categories—credit scoring, biometric identification, and judicial systems—will fall under strict oversight by bodies such as the BDDK and SPK.

■The National AI Ethics Board will set ethical standards; binding supervision and sanctions will be delegated to sectoral regulators.

Potential Market Ripple Effects

■Public procurement could become a permanent revenue line for firms offering AI products and services.

■Energy firms may see increased demand due to the 60% renewable‑energy requirement for data‑center contracts.

■The “GPU for All” program aims to sign capacity agreements with 5 domestic data‑centers, guaranteeing at least 2 million processing hours annually, boosting local hardware manufacturers.

■An initial progress report will be released within 12 months; as budget line items and tender volumes become transparent, equity volatility may rise.

Markets will watch the 2% AI budget allocation and its regulatory scaffolding closely. Financial and energy sectors could experience short‑term turbulence from new demand and compliance costs, but the longer‑term AI‑centric growth may increase the weight of technology‑focused stocks within the BIST‑100, reshaping index composition. Monitoring data‑center energy contracts and licensing pipelines will be critical, as they act as the primary catalysts for this transition.