World Bank warns developing countries to embrace AI or be left behind

Lower-income countries have struggled through the 2020s, hit by successive shocks that prompted the World Bank earlier this year to call it a "lost decade" for their economic growth.The World Bank on Tuesday called on developing countries to embrace artificial intelligence tools to deliver better governance outcomes, warning they risk being left behind if they fail to do so.“AI has thrown developing economies a lifeline, and they should seize it,” Indermit Gill, chief economist of the World Bank Group, said as the organization launched its annual World Development Report.“They do not need large models or big data centers to reap its benefits,” he added, advocating adapting lower-cost AI tools to local conditions to improve health, education, justice and agriculture.Advanced AI models — largely developed in the United States and China — can quickly analyze data and automate many tasks that would otherwise take skilled workers longer to complete.These models, however, require huge data centers and vast computing power, consuming large amounts of electricity and water, with implications for climate change.“Developing economies today are in the midst of their weakest average growth performance in three decades,” a World Bank statement accompanying the report said.“AI could significantly boost that performance before the end of the 2020s while delivering tangible benefits to people.”The report called on countries to use AI to “help extend otherwise costly medical, legal, educational and agricultural services to underserved billions — doing in a decade what might otherwise take a century.”Shock after shockLower-income countries have struggled through the 2020s, hit by successive shocks that prompted the World Bank earlier this year to call it a “lost decade” for their economic growth.The bank has lowered its 2026 global growth forecast to its lowest level since the pandemic, with the economic fallout from the Iran war battering countries around the world.The shock has hit low-income and developing countries hardest, with Asia the worst-affected region.The report urges developing countries to begin working with localized AI tools and solutions, invest in electricity generation and distribution, expand access to computing power and improve the availability of local data.“The window to get this right is narrow,” Gaurav Nayyar, the report’s director, said.“AI presents a once-in-a-lifetime opportunity to solve problems that have resisted solutions for generations,” he added.For the 6.8 billion people — 83% of humanity — who live in low-income and developing countries, AI tools will need to be adapted to meet local needs.The report highlights examples of AI applications in governance, including increasing diabetes screening in Bangladesh and reducing costs for Indian farmers through advanced weather forecasts.The report says the solutions will need to meet people where they are.“For example, AI solutions will need to be delivered through voice calls on basic mobile phones for those who cannot read or afford smartphones,” it said.“Simply importing an AI model does not mean it will work well locally.”Stark warningThe report also calls on policymakers to build public trust as they expand the use of AI.“Improved public services and better learning outcomes in schools will reinforce trust — but if AI embeds bias in government decisions or erodes data privacy, that trust will be difficult to recover,” the statement said.The report also delivers a stark warning: “AI could widen gaps between countries, increase inequality within them, concentrate market power, weaken trust in public institutions, and create new risks for safety, rights, and social cohesion.”Although risks to employment in developing countries are currently low, the report warns that over the long term AI tools could reduce economic mobility by eliminating many of the middle-class jobs that make it possible.The report was written with the aid of several of the world’s most advanced AI tools, including products from OpenAI, DeepSeek, Google and Anthropic, according to a disclosure.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads