Despite recession and economic turmoil, Argentine tech startups are carving a niche as Latin American leaders. 

Few financial reports coming out of Argentina sound hopeful; the slew of economic calamities that have plagued the South American nation for the better part of the last decade can seem endless. Yet, Argentina has continued to register as a bright spot in two significant areas: resilient entrepreneurialism and technology adoption and innovation. This includes the current boom in generative artificial intelligence (GenAI), a market niche that is expected to be worth over $110 billion by 2026 according to Statista, a German data-gathering research firm. Argentina currently ranks fourth in Latin America and has the region’s fifth-largest regional overall potential for producing AI-centered solutions, according to Statista.

“Argentinian companies, especially startups, are at a different maturity level than other Latin American markets,” says Pablo Gottifredi a technology specialist and an entrepreneur and former director of Systems Technology at the Ministry of Justice. “In Brazil and Mexico, the two largest regional economies, they’re still advancing on primary market needs such as fintech, supply issues, Warp and marketplace spaces.” Argentina, by contrast, had its first wave of tech startups 15 years prior to Brazil, “so many of the companies here are already dealing with the advancements of AI integration and development, but by integrating it in their natural flow of operations and not as a separate niche.”

Most larger Argentinian tech companies have already incorporated AI predictive model analyses into their business flow, Gottifredi notes. “They were not born as native AI companies but are using those tools in advanced form due to their maturity level. This is different from other, newer Latin markets, where some of the startups are AI-native.”

According to startupable.com, Argentina is currently home to 238 tech startups and unicorns, 20 of them native-AI startups, or roughly 8%, a figure that aligns with other developed countries and regions. Most local native-AI startups are still at a pre-seed or seed stage, with a handful in series A funding rounds. Market data compiled by KPMG and Statista show that over the past five years and across verticals—and in spite of government-imposed hurdles and a lack of incentives—the Argentinian tech sector had an approximate output equivalent to 63% of the heavily subsidized automobile industry.

Within the DeepStage segment, which encompasses tech startups with licensable or patented models, Argentina captures 30% of total investment in Latin America, says Gottifredi, who is also a co-founder and chief technology officer of MatchIT.

“This is huge, and this includes many biotech companies,” he says, “but this doesn’t mean that venture capital is flowing to these companies because of their AI component or the AI tools they employ. Rather, investments are being made because the business plan is sound, innovative and scalable.”

An Edge In Education

One factor favoring Argentina as a seedbed for innovation and entrepreneurialism is the quality of its educational system. Data for the past 30 years from the UN Development Program (UNDP) places it among the top 30 globally and the best in Latin America. Additionally, the country’s many crises over the past several decades have produced Argentinian entrepreneurs who are highly adaptable in the face of economic uncertainty and adept at reading the marketplace.

“Argentina has a small domestic market, and you can’t count on it for your business to thrive because of misguided government policies,” says Gottifredi, “so it is natural for local businesses to think global—or at least in terms of regional scalability—right from the start. This is in contrast to what you see in big domestic markets such as Brazil, Mexico, or even the US, where startups are often born to offer a specific solution demanded by their domestic markets.”

Out of this landscape come startups such as Bioceres, a biotech crop productivity company, and Satellogic, producer of earth-observation nano satellites. “AI is deeply ingrained in the technology used by such companies, as well as by local fintechs and retail companies,” Gottifredi says. “This is nothing new, and it would be logical for the next big tech evolution to come from countries thinking beyond their borders, like Argentina.”

Regaining Market Trust

While the government’s capital control policies have damaged the country’s business climate, including for venture capital, the announced removal of many such restrictions by President Javier Milei’s government could create singular opportunities for investment in Argentina, despite a lack of trust in the markets.

“Recovering market confidence could take some years, but it will happen,” Gottifredi predicts. “We’ve been there before, and I am optimistic that once the political-economic equation is resolved, Argentina will be very relevant in the global tech and startup space.

Now is the time for foreign investors to start deep-mapping the market, he urges. “Seed and pre-seed tickets in Argentina are significantly cheaper than elsewhere, and among startups in Series A or B funding rounds, it’s possible to find companies which already have market-fit products and only need capital to go global.”