Imagine two scenes unfolding simultaneously. The first is on the slopes of Annapurna, where an experienced Sherpa guide, drawing on knowledge passed down through generations, leads a group of trekkers along a tried-and-true route, reading the weather from the wind and clouds. The second is in a bustling office in Kathmandu, where a young data scientist, a local university graduate, uses predictive analytics and machine learning models to optimize that same trekking route, calculating avalanche risks and offering clients personalized plans based on their fitness.

This contrast is not a fantasy, but a vivid illustration of the reality Nepal is on the cusp of. Artificial intelligence (AI) is no longer a distant concept from Silicon Valley, but a powerful force capable of fundamentally reshaping both traditional and cutting-edge sectors of the Nepalese economy.

Nepal is at a unique point in its development, having recently graduated from the category of least developed countries (LDCs) to the category of lower middle income countries, the state faces a double challenge. On the one hand, it needs to address the classic development problems of fighting poverty, developing infrastructure, and strengthening institutions. On the other hand, the country finds itself at the epicenter of a global technological revolution that is not waiting for old problems to be solved. With a GDP of about $40.91 billion in 2023, Nepal's economy is small by global standards, making it both more vulnerable to external shocks and potentially more flexible for rapid transformation.