AI in Ukraine: How tech is coping with war and when machines could replace humans
The independent analytical center We Build Ukraine held a conference on the development of the IT sector (Photo: We Build Ukraine)
The IT sector is the largest exporter of services for foreign companies. Ukrainian IT teams are highly valued in the international market, and the Diia.City tax regime has proven effective among development companies and investors. However, the sector has faced a shortage of talent and requires further support and stable investment conditions.
How the war has affected the sector’s development, whether it will maintain its investment appeal, what companies are doing to attract the best specialists on the market, and how artificial intelligence is already changing lives today — in the material by RBC-Ukraine.
Significance of the IT Industry
The IT sector has already become one of the growth drivers of the national economy. While the agricultural and metallurgical industries lead in terms of goods exports, the IT industry ranks first in service exports. The importance of the IT sector was discussed during the conference "The Role of the Technology Industry in the Country’s Recovery and the Formation of a New Ukrainian Economy," held on October 21 by the independent analytical center We Build Ukraine. During the event, N-iX Director of Industry Affairs Sviatoslav Kavetskyi said that IT companies export around $7 billion worth of services annually.
The sector did not suffer a significant blow as a result of the full-scale invasion and continues to function successfully. "Despite everything that is happening, the IT industry still sees mergers and acquisitions, and investments are being made," commented We Build Ukraine CEO Oleksandr Kubrakov.
Photo: We Build Ukraine CEO Oleksandr Kubrakov says that IT remains a growth driver of the economy (We Build Ukraine)
The Ukrainian IT sector continues to grow, with many local companies successfully selling their products to Western markets as well as to Asia. Ukrainian startups are scaling rapidly and attracting strong interest from Western investors. Twenty-two IT clusters (Kyiv, Lviv, Kharkiv) are already functioning successfully in the country, noted Balint Silhavi, Senior Expert at Boston Consulting Group (BCG), commenting on the state of the industry.
An important advantage of Ukraine as a jurisdiction for IT investment is the availability of a highly educated, professional, and cost-effective workforce, the expert added. Boston Consulting Group forecasts that the current size of the IT sector could grow two- to fourfold by 2040, with an additional potential increase of 15–25% if companies and teams that relocated abroad eventually return.
Investment attractiveness of the sector
Ukrainian IT already has a strong reputation in Western capital markets and continues to attract investments from leading firms such as Horizon Capital. In recent years, Horizon Capital has been actively investing in technology companies, both service-based and product-based IT businesses. The firm is also investing in retail projects and sees strong prospects for investments in the energy sector.
"The timeline of how institutional investors view Ukraine is positive," said Horizon Capital Principal Denys Sychkov. He added that to attract investment, founders are increasingly looking for solutions to ensure their assets as well as business models that are less vulnerable to wartime challenges.
Photo: Horizon Capital Principal Denys Sychkov speaks about the projects the company invests in (We Build Ukraine)
One of Ukraine's key advantages is the legal and tax framework of Diia.City. It offers lower taxes, a simplified model of labor relations and reporting, and strong intellectual property protection for IT businesses. Sviatoslav Kavetskyi emphasized the convenience Diia.City provides for company reporting, as well as its benefits for investor relations, adding that the Ministry of Digital Transformation maintains a strong level of dialogue with the business community.
"It’s a great initiative, but we are still not using it to its full potential," Kavetskyi said, noting that IT companies have not yet returned to pre-war growth rates (20% and more per year). However, steady growth is present, allowing businesses to look to the future with optimism.
Photo: MODUS X HR Director Snizhana Katsiuba noted that IT specialists in Ukraine often earn more than in neighboring Poland (We Build Ukraine)
The Diia.City framework may even help bring some IT specialists back from abroad, believes MODUS X Chief HR Director Snizhana Katsiuba. "Diia.City’s conditions are a very powerful tool for bringing Ukrainians home, because we see many cases where specialists in Ukraine receive a higher net salary than in Poland," she explained. She added that it is important to maintain the stability of the conditions provided to Diia.City resident companies.
Favorable investment conditions have allowed the sector to strengthen its position on the international market. For instance, N-iX has the majority of its client portfolio in the United States, followed by the United Kingdom, Scandinavian countries, and the rest of the world. Sviatoslav Kavetskyi spoke highly of partners from Scandinavia, noting that they are not driven by the lowest price but instead aim to build long-term, sustainable relationships with contractors.
Photo: Svyatoslav Kavetskyi, Director of Industry Affairs at N-iX, spoke about the advantages of collaborating with partners from Scandinavia (We Build Ukraine)
Stanislav Lurie, Head of the Osavul Ukraine Office, emphasized the importance of cooperation with clients and investors from Scandinavian countries, as these companies actively support Ukraine and "invest with their hearts — in what they believe in and what truly makes an impact." He encouraged Ukrainian companies to communicate more and establish deeper connections with international partners.
Photo: Stanislav Lurie, Head of the Osavul Office in Ukraine, emphasized the importance of expanding contacts with international partners (We Build Ukraine)
Partnerships in markets such as Japan and South Korea are also of growing interest to Ukrainian IT projects.
Human capital development
One of Ukraine's key advantages in the global IT market is the availability of highly skilled talent. Major industry players devote significant attention to developing this human potential. For example, KERNEL, a major agribusiness company, has its own internal IT team. The company's HR Director, Nataliia Teriakhina, openly noted that KERNEL cannot offer IT specialists salaries at the market level. However, it provides something equally important: the opportunity to influence results and see the tangible impact of their work. The company offers stability, communicates upcoming changes in advance, and increases compensation when new business opportunities arise.
"In unstable times, it’s extremely important for a company to serve as an island of stability for its people. It may seem that this only matters to line workers, but that's not true — it matters to everyone, because we are living in a very chaotic period," the KERNEL top manager emphasized.
Photo: KERNEL HR Director Nataliia Teriakhina emphasized non-material incentives for retaining talent (We Build Ukraine)
Her view was supported by Maryna Mirkina, a leading trainer and speaker at the DAN.IT Education learning hub. She noted that stability in working conditions is a crucial component of long-term employment relationships. "In the long run, it’s relationships, people, and opportunities that matter. That's what keeps people together," she commented.
To attract and develop individuals who are just beginning their careers, it is essential to offer the chance to learn and gain initial experience. With this goal in mind, EPAM Systems — which employs around 50,000 people — created one of the most popular internship programs on the market.
"Even during these difficult years, we bring about a thousand young specialists into the company each year and train them. Most of them stay," said Yurii Antoniuk, Vice President and Head of EPAM in Central and Eastern Europe.
The company also effectively integrates veterans into the IT industry, entrusting them not only with basic tasks but also with more complex challenges.
The preparation of new specialists is handled directly by higher education institutions, which require changes and adaptation to market needs. Bohdan Kruhlyk, Director of FRENDT — a company developing IT solutions for agribusiness — said that his company is actively involved in updating university curricula in Vinnytsia. Students must gain real market experience and learn to work with modern equipment. Educational institutions need to adopt contemporary practices that are in demand among agricultural companies, he added.
Photo: Bohdan Kruhlyk, Director of FRENDT, stated that AI is already replacing combine harvester drivers in Ukraine (We Build Ukraine)
The latest labor market trends were presented at the We Build Ukraine conference by Viktoriia Nalyvaiko, CEO and co-founder of the recruiting company BazaIT, who noted that the total number of job openings on Work.ua has returned to its pre-war level.
Photo: Viktoriia Nalyvaiko, CEO and co-founder of the recruiting company BazaIT, presented the labor market’s recovery dynamics (We Build Ukraine)
In the IT sector, the number of monthly vacancies has reached 11,000, compared to 14,000 before the war. “The dynamics of IT vacancies have not yet fully recovered — the talent shortage remains,” Nalyvaiko commented, adding that companies should implement upskilling programs for their existing teams.
Use of artificial intelligence
The IT sector's expertise is already contributing to the development of many areas of the economy, and its presence should be strengthened in the defense industry as well, said Oleksandr Kubrakov. Many software development tasks that military brigades are currently trying to solve on their own could be completed by IT companies within just a few months.
"This is mutually beneficial, because around the world many innovations have emerged from the military sector — just look at the experience of the United States or Israel. This issue is particularly important given the urgency and the needs of the military," Kubrakov noted.
Ukraine is already taking the lead in developing autonomous robots, said Yaroslav Azhnyuk, founder of the defense companies The Fourth Law and Odd Systems. "In a single year, Ukraine on its own — and Russia on its own — have made more progress in defense technologies and the use of artificial intelligence for these purposes than Europe has managed while trying to catch up," he said.
Photo: Yaroslav Azhnyuk, founder of the defense companies The Fourth Law and Odd Systems, noted that battlefield robots will become increasingly autonomous (We Build Ukraine)
The future of the battlefield lies in technologies where autonomous ground robots will be able to travel tens of kilometers, carrying strike drones and interceptor drones. The former will attack enemy targets, while the latter will intercept hostile UAVs launched against the robotic platform.
"These are examples of technologies already under development," Azhnyuk commented, adding that Ukraine must build an ecosystem capable of generating more challenges for the enemy in a given period of time than the enemy can generate for the Defense Forces.
Innovation in the agricultural sector
According to Bohdan Kruhlyk, head of FRENDT, innovation in agriculture is also accelerating. There are already programs on the market that help forecast crop yields, although they are not yet highly accurate. Agribusinesses are also being offered ultra-precise sprayers that can apply crop protection products with exceptional accuracy, significantly reducing the amount of chemicals used.
"When we apply fewer chemicals to plants, we will ultimately consume a higher-quality product. The future lies in quality protein and eco-friendly production," Kruhlyk said.
He added that an AI-based program is already available in the Ukrainian market to help agronomists use seeds, fertilizers, and crop protection products more efficiently. FRENDT has been actively promoting these technologies within the agricultural sector, achieving significant progress over the past three years.
Speaking about the future of AI technologies in agriculture, Kruhlyk noted the growing importance of weather satellites, which make it possible to forecast rainfall. In addition, this year Ukraine will test, for the first time, a combine harvester operated by software rather than a human. "Within 10 years, we will definitely remove human operators from tractors," the FRENDT director said.
Photo: Yanush Podvysotskyi, Head of Information Systems Administration and Cybersecurity at the energy company KNESS, presented the use of AI in the energy sector (We Build Ukraine)
Artificial intelligence also helps forecast electricity generation from solar power plants, reduce energy losses, and prepare commercial proposals tailored to specific clients. Yanush Podvysotskyi, Head of Information Systems Administration and Cybersecurity at KNESS, spoke about the areas where AI is being applied in the energy sector. He added that one of the most critical factors when working with AI is maintaining cybersecurity standards. To address this, KNESS has developed compliance rules that all employees using corporate AI models must follow.
AI tools also help companies use their employees’ time more efficiently and even solve creative tasks, said Kostiantyn Karpov, Business Development & Partnerships Lead at HOLYWATER, a company producing vertical-format series.
Photo: Kostiantyn Karpov, Business Development & Partnerships Lead at HOLYWATER, said that AI can already assist with creative tasks (We Build Ukraine)
"When we talk about creative processes, the greatest value of integrating AI into the decision-making flow is the accelerated cycle of generating and testing hypotheses. It’s simple math — you cannot get many successful hypotheses if you initially have a bottleneck in their quantity," Karpov explained.
The use of AI is not limited to marketing. At HOLYWATER, artificial intelligence supports code development, operational workflows, and financial processes.
Ukraine already has a strong standing in the global IT market. The tax framework of Diia.City has proven successful, and government support should continue. Further facilitation will allow the IT sector to become one of the key components of the country’s recovery and its integration into high-tech global value chains.
