Egypt Is Exporting Talent, Not Technology, and One Patent Holder Explains Why That Has to Change

So joining me today is Professor Rael Badawi, the member of the Research Council on the Communication and Information Technologies.

He is also an inventor with issued patents in computer vision who took his own university research and built a company around it.

Professor Badawi, welcome to FinTech TV.

Yeah, thank you.

So Professor, you did the thing Egypt keeps saying it wants people to do.

You took research out of a university lab, patented it, and built a company around it, computer vision technology that ended up deployed commercially in North America.

When you look at Egypt's AI sector today, how many people are actually on that path, and what did you have access to perhaps in Calgary that a researcher in Cairo does not?

In Egypt, people are having lots of hope and interest to take this path.

However, there are some elements, some floating elements we have to consider.

When you mention patents, we had a North American patent where we actually sell the technology, and I remember one of the patents had been acquired by another patent troll.

And the troll went after major companies and they trebled or maybe more than 1000 what they paid us for licensing these patents.

So you have a system which respects intellectual property.

When you talk about Egyptian patents, they only protecting Egypt, so there is no really a global market.

The other We had in Canada or in North American system was a quasi company backed by the government as nonprofit, and they were injecting real investment in companies.

Real investment means cash, not give you 200,000 Egyptian pounds and another 800,000 of servers from the same company.

They were backed by real entrepreneurs.

People have been doing it before.

I was sitting with the founder of, for example, Silent Witness.

Silent Witness is the one who invented the automatic door openers.

So the the founder of this company, I was sitting across of him and asking him to invest in my company.

So we had.

We had access to people.

We had government programs which can back up this kind of operation.

Unfortunately in Egypt, the majority of the services are done by university professors and the entrepreneur education done by university professor, and nobody asked how many times they had building companies themselves.

They actually built one company which is a company offering consultation.

Not the companies which have been went bankruptcy or they don't understand the burden of cash flow in a startup, they don't understand so many, so it's a good story, good entertainment story for the new graduate to listen to.

So you know we just spoke about Karnak, and we know that Egypt launched Karnak as a national model and then open sourced it at 41 billion parameters.

You chose the opposite route with your own work.

You patented it.

Was open sourcing the national model the right economic decision, or did Egypt just hand away the one asset it spent public money building?

This is a very tricky question.

If you want to launch preparatory solutions, it has to be protected because preparatory solutions will go to Homeland Security.

My technology has been deployed in at least 48 countries when I was counting, when I was like before 2016, when I was as part of the team.

Before I got my money out and I left.

So when you talk about technology in preparatory areas, in high secure areas, in defense regime, it has to be protected.

Nobody can get it as open source.

If you look at Karnak, Karnak was actually a good initiative.

There are lots of Work has been done in prosecutions in so many areas where they use it, and they have the accuracy of about 86% as we, as they claim in some public demonstration.

However, I believe the Karnak itself has been released too late because right now we see all other large language models are very efficient now with Arabic accent, with Arabic dialect.

They grab even the street language of so many regions.

So I strongly believe that this is open source because it will not get any value.

By the way, Emirates, and I know you have a base in Dubai, Emirates itself has been releasing about 2 years ago another model.

And the model did not pick up in the right track as a mainstream because whoever come from Google, whoever come from OpenAI, from Microsoft, these people have systems which were able to accommodate the dialect.

So the question will be, is Karnak, if Karnak is professional and very tailored to the Egyptian accent, why did you leave it open?

And why you didn't keep it so you can have systems which basically Egyptian-based systems for your for your point about ownership, it's part of the competition.

Part of the being there is to release, so the open source will not let us let go for the actual assets.

It actually enables people to develop better the assets because part of the open source is whatever you add to the open source, you release to the open source, so it will enrich.

That's great.

Now, now let's talk about, uh, the connector side of things.

Now Connector will build generative and agentic AI products in Cairo and deploy them worldwide.

If Egyptian engineers write that code, but a Spanish company owns it, uh, has Egypt built an AI industry or a more expensive form of outsourcing?

It's a more formal way of outsourcing, and we had before several initiatives in Egypt with the same.

Some of the ships manufacturing, OK, so we had Mentor Graphics, and Mentor Graphics now became been acquired by some other company.

Mentor Graphics used to be the largest CAT tools system around designing the ships.

The biggest center was actually in Egypt.

And you never claim that Egypt has CAT tools, infrastructure or CAT tools.

So when Connecticut will come to here, basically you have part of the ecosystem is full talent, and because we have about 92 programs, as they announced yesterday in artificial intelligence, and they had about 126,000 students, more or less, you talk about divide by 4, you talk roughly about 30,000 graduates every year.

At least the top 1% of the 30,000 worth lots of money.

So instead of trying to get them and work out with the visa process and and what have you to get them to Spain, it's easier to be beside the talent, and this is the same as what Bangalore did maybe 20 years ago, what China did 2030 years ago.

It's basically bring these companies here, multinational companies.

They use the talent, they build the products.

We have here also a large company called Valeo which do the car subsystems for major manufacturing in Europe.

And you don't, you don't classify Egypt as car manufacturing or car subsystem players because Valeo has the European label you can call it, right?

So I don't want to sound negative, OK, no, no, no, I don't want to sound negative, OK, no, no, actually optimism is apparently surrounding this topic greatly, but let's talk about what the communications.

Mr.

Rafat Hindi has has said recently he put actually an $8 billion outsourcing export target on the table for 2028, up from around $5 billion last year, and that's a services line.

Now the question is what would it take for a meaningful share of that number to be licensing and product revenue instead of just billable hours.

It couldn't be because basically you are developing on the top of a platform or a technology.

The Majority of us worked overseas in North America and major international companies.

These companies have their own platforms.

They want to increase the platform.

We don't have deep tech technology. in Egypt to own something from scratch.

We are always extending.

So if you want to do it as a license, we have first to license the international platform in whatever domain and then develop our own version or briefification out of it, and then we go sell it.

Without this mechanism, we are also, we are only making the rich richer, you know this expression, you know, make the rich richer and keep the poor poorer, because you basically work, work hard on the billing hours.

There are a couple of initiatives, but these are a couple of silos where they were able actually to push technology from.

Egypt to outside in the micro microelectronics and manufacturing process, but this was only two of its kind, so this is not a common thing.

So whatever we talk about as exporting talent, we are only exporting talent.

We are only building ours.

And where exactly does the chain break in your opinion in Egypt?

Is it the university, the patent, the funding round, or the first serious customer perhaps?

What do you think is the weakest link here?

The weakest link, if I mirror what what we used to do in Saudi Arabia with Maka Techno Valley, is the trust of the first customer.

The first, the first buyer don't have enough trust in the local technology development, and this was phased in Saudi. for some time till the society has been able to overcome.

The other thing is we don't have the systemic success story.

So for example, we had souk, and souk has been acquired by Amazon.

So nobody understands that Egypt at a certain point was the leader in the Middle East in e-commerce.

And they've been acquired by the world leaders.

So this kind of acquisitions internationally will come to your question as well is how much you let out of Assad.

And the other part which is we have been learned.

That you build a startup company for exit.

Egypt does not have exit because there is no local acquisition.

There is no emergent acquisition of companies, as we learn in books in Egypt.

So because we don't have this part, people don't understand what then what will happen.

I will keep working for the company as a government employee or not.

Yeah, there, there are definitely a lot of questions surrounding this, and I think that even down the line there will be more questions arising up and it's it's great having this conversation with you, and I think we should have a follow up conversation on this very soon.

Thank you very much for joining us today, Doctor.

Thank you, any, anytime.