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

The World Bank on Tuesday called on developing countries to embrace artificial intelligence technology tools to deliver better governance outcomes, warning that they risked being left behind if they failed to do so.

“AI has thrown developing economies a lifeline, and they should seize it,” the Chief Economist of the World Bank Group, Indermit Gill, said as the organisation launched its annual World Development Report.

“They do not need large models or big data centres to reap its benefits,” he added, advocating for the adaptation of lower-cost AI tools to local conditions to deliver results in the health, education, justice and agricultural sectors.

Advanced AI models — largely developed in the United States and China — offer the ability to quickly analyse data and automate many tasks that otherwise take skilled humans longer to do.

These AI models, however, require huge data centres and large amounts of complex computing power, using massive 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. AI could significantly boost that performance before the end of the 2020s while delivering tangible benefits to people,” said a World Bank statement accompanying the report.

The report calls for 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.

Lower-income countries have struggled through the 2020s, hit by a series of successive shocks that saw the World Bank earlier this year dub 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 of 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 bank’s new report advocates for developing countries to start working with localised AI tools and solutions now, and to 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. AI presents a once-in-a-lifetime opportunity to solve problems that have resisted solutions for generations,” said the report’s director, Gaurav Nayyar.