For much of the past century, developing economies have had little choice but to wait for new technologies to become affordable, accessible and relevant. The World Bank believes artificial intelligence could change that.
In its World Development Report 2026, the lender argues that AI gives poorer economies a rare chance to compress decades of development into years—not by building the world’s most powerful AI models, but by applying affordable, locally adapted tools to solve persistent problems in healthcare, education, agriculture, public services and business.
The opportunity arrives at a critical moment. Developing economies are experiencing their weakest average growth in three decades, yet AI could lift productivity and improve living standards before the end of the 2020s if governments move quickly to strengthen electricity networks, internet connectivity, digital skills and institutions.
“AI has thrown developing economies a lifeline, and they should seize it,” World Bank Group Senior Vice President and Chief Economist Indermit Gill said.
Unlike earlier waves of technological change, the report argues, developing countries do not need to compete with the United States or China in building frontier AI models or investing billions of dollars in hyperscale data centres.
Their competitive advantage lies elsewhere: adapting smaller, cheaper AI applications to local languages and local challenges.
That distinction is reflected in the labour market. While fears that AI will replace workers dominate debate in advanced economies, the World Bank finds a different picture in developing countries.
Only 4.5 per cent of existing jobs in low- and middle-income economies face automation risks from generative AI, compared with 14.2 per cent in high-income countries.
The bigger prize is productivity.
Around 16.2 per cent of jobs in developing economies could become significantly more productive through AI, only slightly below the 18.7 per cent estimated for high-income economies.
Rather than replacing workers, AI is expected to make them more capable—helping doctors diagnose diseases, farmers improve crop decisions, teachers personalise learning, entrepreneurs analyse markets and civil servants deliver public services more efficiently.
The report says AI is already enabling governments and businesses to process information faster, improve forecasts and solve operational problems at scale.
Public agencies could deploy the technology to strengthen tax administration, improve social protection, coordinate disaster response and expand healthcare and education services, particularly where skilled professionals remain in short supply.
Yet the report argues that AI is not a shortcut around weak institutions.
Many developing countries still lack reliable electricity, affordable broadband, computing capacity, local-language datasets and the skilled workforce needed to deploy AI effectively.
Without those foundations, the technology could deepen inequalities instead of reducing them, concentrating market power in a handful of companies while creating new risks around privacy, bias, safety and public trust.
Instead of chasing technological prestige, the World Bank urges governments to follow a practical three-stage path: adopt AI tools that already exist, adapt them to local conditions and only then advance towards developing frontier capabilities.
“The window to get this right is narrow,” said Gaurav Nayyar, Director of the World Development Report 2026.
Countries that invest now in power, connectivity, skills and institutional capacity will be best placed to translate AI into faster growth and better public services, he said.
The report underscores how basic infrastructure remains the biggest barrier to AI adoption. In Sub-Saharan Africa, nearly one-third of rural schools still lack reliable electricity and more than two-thirds remain without dependable internet access.
Through its Mission 300 initiative, the World Bank Group and its partners aim to extend electricity to 300 million people in the region by 2030, laying the groundwork for broader digital inclusion.
Beyond infrastructure, the report calls for greater access to computing power, more data in local languages, stronger systems to evaluate AI projects and governance frameworks that encourage responsible innovation while protecting privacy and public trust.
For the World Bank, the AI race is not one developing countries have already lost. It is one that has only just begun—and success will depend less on inventing the next breakthrough model than on building the foundations to put today’s technology to work.
