The project to build an “AI factory” in Armenia, implemented with the participation of NVIDIA and Firebird, is increasingly presented as a symbol of technological breakthrough and stronger regional competitiveness. However, as economist Vahe Davtyan notes, behind the appealing façade of digital initiatives lie fundamental constraints—primarily in the energy sector, without which such projects simply cannot operate sustainably.
The Georgian precedent: rising load and tariffs
The expert points to Georgia’s experience as illustrative. “In Georgia, within a short period, data centers and mining infrastructure became a notable segment of energy consumption, reaching about 5% of total demand. As a result, a new type of consumer emerged in the system—stable, energy-intensive, and highly concentrated,” he says.
This, he continues, led to structural changes: the load on the energy system became constant and more strained. By early 2026, electricity consumption exceeded 2.7 billion kWh against generation of about 1.9 billion kWh. “The deficit is covered by imports, increasing external dependence and leading to tariff hikes—since April they have risen by 21–33%,” Davtyan emphasizes.
At the same time, due to their high solvency, data centers effectively crowd out other consumers, redistributing energy resources in their favor.
Armenia: risks higher than they seem
In Armenia, these risks could manifest even more sharply. “The country’s energy system already faces a number of constraints: dependence on imported energy resources, seasonal fluctuations in hydropower generation, and the limited capacity of the existing nuclear power plant,” the expert notes.
Against this backdrop, plans to build large-scale AI infrastructure appear especially ambitious. According to Rev Lebaredian, by the end of the year Armenia could deploy around 50,000 GPUs, placing it among the global top five. Further expansion to 110,000 GPUs is also under consideration.
The key issue is not technology, but energy
In this situation, Davtyan stresses, the critical factor is not the creation of a data center itself, but the availability of an energy base to support it. Without it, any technological leap risks turning into additional strain on the system, higher tariffs, and increased dependence on imports.
Despite its rapid development, solar energy by its nature cannot provide a stable baseload for energy-intensive facilities of this scale.
A new nuclear plant as a strategic necessity
In this logic, the construction of a new nuclear power unit ceases to be optional and becomes a systemic necessity. This concerns not only energy security but also the country’s long-term technological development potential.
In other words, the future of Armenian AI depends not only on investments in computing power, but also on the state’s ability to supply it with energy. “Without this, even the most ambitious digital projects may face hard constraints from the real sector,” he concludes.