Eesti.ai: Estonia's national plan to use AI to grow the economy as its workforce shrinks

The problem

Artificial intelligence is moving fast, and the global economy is becoming more competitive. Estonia's deeper pressure, though, is demographic. An ageing population means its labour force is no longer expanding, so the country cannot raise output simply by employing more people. For a small state in that position, the speed and quality of AI adoption carry real economic weight.

Estonia starts from a strong base as a digital state, with mature public data and well-developed digital infrastructure. The task is to turn that base into economic growth, using AI to make people's work more productive.

Estonia was already running several separate AI projects across different parts of government. Without a national framework to join them up, these efforts ran in parallel, and the country's strengths as a digital state had yet to be converted into growth at scale.

The solution

Prime Minister Kristen Michal launched Eesti.ai on 27 January 2026, alongside a group of senior entrepreneurs, as the government's response to that pressure. It runs as a single national programme, developed with help from international specialists and firms, and pursues two goals: to put AI to work methodically across all parts of the economy, and to build Estonia's own AI tools. Its first areas of focus are education, healthcare, and security.

Michal framed the initiative around Estonia's digital-state advantage and the value of public-private cooperation. "Through cooperation between the public and private sectors and the smart use of data, we can develop new and effective artificial intelligence applications and capabilities that other countries are unable to achieve, and put them to work for the benefit of our economy," he said, adding that with AI Estonia can "do more work with a higher added value with fewer people and essentially double the value of Estonian people's work by 2035."

Led by the Government Office, with an expert council
Day to day, the initiative is run by a dedicated team inside the Government Office, supported by a cross-ministerial working group and an expert council of entrepreneurs and specialists. The council is chaired by Markus Villig, who founded the ride-hailing company Bolt, and reports to the prime minister. Its members are drawn from start-ups and venture-capital investors in Estonia and abroad, technology and manufacturing firms, and research bodies.

A deliberate focus on a few high-impact projects
Early on, the council signalled that it would be selective, choosing a handful of projects with the potential for significant near-term impact. "In the coming months, we will clarify with the council the scope and activities of the programme," said council member and entrepreneur Sten Tamkivi. "The aim is to focus on a small number of important and high-impact projects so that something significant can already be achieved in the next 18 months."

Building on Estonia's existing AI projects
Eesti.ai builds on AI work already happening across government. These efforts include the AI Leap programme in schools, the AI tools developed by the Ministry of Justice and Digital Affairs, and a drone programme run by the Government Office.

The impact

Eesti.ai was launched in January 2026 and is still at an early stage, so there are no economic outcomes to report yet. What follows are the programme's stated targets and its first delivery steps.

1. Economic growth is the headline goal
The most recent estimate dates from April 2026, when Prime Minister Michal said that if Estonia became Europe's leading adopter of AI within a decade, this could add 1 to 2% to yearly economic growth, or €400 to 800 million each year. That figure sits within a longer-run ambition the government has held since the launch: expanding the economy by a quarter over five years and by half over a decade, and doubling the output value of Estonian workers by 2035. All of these are government targets, not outcomes that have been achieved.
2. The first projects have been selected
In April 2026 the council signed off on its first 15 projects, chosen to speed up the uptake of AI nationally and to make the economy more competitive. Each one has to show measurable gains in time, cost, or quality. They cover six fields, from workforce skills, healthcare and education to business, the public sector, and the underlying AI infrastructure. Financing is split between the national budget and European Union funding; Estonian Public Broadcasting reported in June 2026 that this first phase would be backed by an extra €10.98 million through a supplementary state budget, alongside €7 million earmarked for business-support measures.

Lessons learned

Eesti.ai is too new to offer lessons drawn from hindsight. Its early design choices do, however, reveal the thinking behind it.

• Build on existing strengths. Estonia is treating its long investment in digital government, its data systems and connected infrastructure, as a starting advantage that few countries can match, and as the platform on which new AI tools can be built.
• Connect what already exists. Eesti.ai coordinates AI projects that were already running in separate parts of government, gathering them under one national umbrella.
• Pair public and private expertise. Government staff and outside entrepreneurs work together on the initiative. The thinking is that combining public and private know-how, and making good use of the state's data, is what allows new AI capabilities to take shape.
• Keep the focus tight. The council deliberately kept its first set of projects small, on the expectation that concentrating effort would produce visible results within 18 months.

This case study was written with assistance from artificial intelligence.