Over the last century, developing nations typically had to wait for new technologies to become affordable and adapted to local needs before reaping their benefits, but artificial intelligence (AI) has the potential to break this historical trend.
According to the World Bank’s World Development Report 2026, AI offers a rare opportunity for developing countries to achieve decades of developmental progress within just a few years.
The report highlights that developing economies do not necessarily need to compete in building the world’s most powerful AI models. Instead, the greatest potential lies in adopting and adapting existing technology to address local problems, specific markets, and native languages.
This shift comes at a critical time as these economies face their weakest average growth in three decades, making rapid investment in electricity infrastructure, internet connectivity, and digital skills essential to boosting productivity by the end of the 2020s.
Indermit Gill, Senior Vice President and Chief Economist of the World Bank Group, stated that AI has created a new opportunity that developing nations must seize. He emphasised that the primary prospect for these countries is increasing productivity rather than the threat of job displacement.
Analysis indicates that only 4.5 per cent of jobs in low- and middle-income countries are at risk of automation due to generative AI, compared to 14.2 per cent in high-income nations. Conversely, approximately 16.2 per cent of jobs in developing countries could become more effective and productive through the use of AI.
The World Bank asserts that the core strength of AI is enhancing human capability rather than replacing it. Key areas of impact include more accurate medical diagnoses, improved agricultural decision-making, personalised education, and enhanced market analysis for entrepreneurs.
Moreover, the public sector could see major improvements in tax administration, social protection programmes, and disaster management. However, the report warns that AI cannot bypass the requirement for robust infrastructure and institutions. Without reliable electricity, affordable internet, and local language datasets, AI could widen inequality and introduce risks regarding data privacy, bias, and public trust.
Governments are advised to follow a three-stage strategy: first adopting existing AI, then adapting it for local needs, and eventually building the capacity to create advanced technology.
Gaurav Nayyar, Director of the World Development Report 2026, warned that the window of opportunity is narrow, urging immediate investment in digital connectivity and institutional skills.
A significant hurdle remains the infrastructure gap, particularly in sub-Saharan Africa where many rural schools lack electricity and stable internet. To address this, the World Bank and its partners have launched the Mission 300 initiative, aiming to provide electricity to 300 million people in the region by 2030.
Ultimately, the World Bank maintains that developing countries are not yet behind in the AI race, as success will depend on building the necessary foundations to utilise existing technology effectively rather than building the largest models.
