Brazil’s Artificial Intelligence Strategy (“EBIA”) was published last year and in recent weeks has made headlines as the administration touts funding startups in the AI ecosystem. The document is slick and well intentioned – it also lacks clarity and vision.  

A Brazil-based tech executive explained, “When talking about the EBIA, there was widespread criticism of the document, since it does not outline any strategy, there is no element to encourage the use of AI as components to improve the digital ecosystem. This was a document written by people who don’t really grasp how the sector works.”

"When talking about the EBIA, there was widespread criticism of the document, since it does not outline any strategy, there is no element to encourage the use of AI as components to improve the digital ecosystem."

A tech executive, Brazil

This is a shame since the startup ecosystem in Brazil has been impressive in recent years and notable for seeking constant innovation, focusing on challenges and solving them in creative ways. In 2020, Brazilian AI startups raised a record-breaking USD 365 million led by outfits including Quicko, Stilingue and Kyas.AI. AI represents a higher level of innovation and customer interaction that could make the country’s tech startups – from finance to retail - more competitive globally. 

A cynic might argue that the administration is increasingly trying to offload its own problems – from public sector efficiency to streamlined data collection and analysis to the private sector. “I do not feel the government has a sincere interest in developing AI, rather it wants to outsource problems which the administration itself must address,” added the tech executive. 

The CEO of a leading financial management company in Brazil said, “Whatever the politics behind the EBIA, there is a strong interest from the private sector in investing in AI solutions, however, in very specific sectors such as Agro and FInTechs." Better understanding and using big data is a key concern for the administration – startups such as Florianopolis-based Indicium use AI to better understand client behaviour across industries including e-commerce, retail and manufacturing. It is easy to see how such technology would be useful in better understanding healthcare or housing needs for example.  

“Whatever the politics behind the EBIA, there is a strong interest from the private sector in investing in AI solutions, however, in very specific sectors such as Agro and FInTechs."

A CEO of a financial management company, Brazil

The government’s idea of creating new technology parks and upgrading those that exist emphasises the role of physical technological infrastructure. The challenge is infrastructure deficits in other more practical areas – transport, for example or the willingness of tech professionals to uproot and move nearby. These are often not factored into initial costs and can make ideas such as technology parks prohibitively expensive given that startups themselves can be a risky bet. “Realistically, technology parks have become an outdated idea, leaving the internet and communication tools as our virtual park where everyone meets,” explained the tech executive.  

Brazil’s tech startup ecosystem remains optimistic on the future of AI, “Regardless of whether the government supports us not, especially in terms of policies that guide the industry, I think Brazil has the right attributes to become an AI hub,” remarked the tech executive.  

It remains too early to tell whether investment flows will weaken amidst lack of clarity from the government, regulatory uncertainty and poorly conceived guidelines. What is more certain, to paraphrase Adam Smith - it is the invisible hand of technology that will regulate what the government is missing.