Artificial intelligence (AI) has the potential to compress a century of development into a decade for developing economies, provided governments move quickly to strengthen electricity access, internet connectivity, digital skills and institutional capacity, according to the latest World Development Report 2026 released by the World Bank Group.
The report, titled The Promise of Artificial Intelligence, argues that AI presents a rare opportunity for low- and middle-income countries to accelerate economic growth and improve public services without necessarily building large AI models or expensive data centres.
AI to augment, not replace, jobs
Contrary to widespread concerns over job losses, the report says workers in developing countries face significantly lower automation risks than those in advanced economies.
Only 4.5% of existing jobs in low- and middle-income countries are at risk from generative AI, compared with 14.2% in high-income economies. Meanwhile, 16.2% of jobs in developing nations could experience meaningful productivity gains through AI, nearly matching the 18.7% expected in wealthier countries.
The findings suggest AI’s biggest contribution in emerging markets will be to enhance workers’ productivity rather than replace them.
Growth catalyst amid economic slowdown
The World Bank noted that developing economies are experiencing their weakest average growth performance in three decades. It believes AI could provide a significant boost to economic growth before the end of this decade if countries create the right enabling environment.
According to the report, AI is already helping governments, businesses and citizens improve decision-making, forecasting and service delivery. Applications include faster medical diagnosis, precision farming, improved tax administration, better disaster response, enhanced education and more efficient delivery of welfare programmes.
Three-step roadmap
The report recommends a phased strategy for developing countries: adopt existing AI tools, adapt them to local languages and domestic requirements and advance towards developing frontier AI capabilities only after building strong digital foundations.
The World Bank cautions against attempting to replicate the sophisticated AI ecosystems of advanced economies before establishing reliable infrastructure and institutional capacity.
Infrastructure remains the biggest hurdle
The report warns that inadequate electricity, internet connectivity, computing power, local-language datasets and skilled manpower remain major constraints across many developing countries.
It highlights that in Sub-Saharan Africa nearly one-third of rural schools still lack reliable electricity, while more than two-thirds do not have dependable internet connectivity. Addressing these gaps will be critical to enabling broader AI adoption.
The World Bank said it is supporting infrastructure development through initiatives such as Mission 300, which aims to provide electricity access to 300 million people across Sub-Saharan Africa by 2030.
Trust and governance equally important
Beyond physical infrastructure, the report stresses the importance of creating responsible AI governance frameworks. Governments are encouraged to begin with voluntary industry standards while using existing laws to address issues such as bias, privacy violations and misuse of AI.
It also calls for stronger procurement systems, better evaluation frameworks and evidence-based policymaking to ensure AI investments deliver measurable outcomes.
‘A lifeline’ for developing economies
World Bank Group , Senior Vice President and Chief Economist Indermit Gill said AI offers developing countries an opportunity to dramatically improve healthcare, education, agriculture and judicial services through affordable, locally adapted AI applications.
He noted that unlike previous general-purpose technologies such as electricity or the internet, AI is spreading much faster and is highly adaptable to local contexts, making timely action critical.
Gaurav Nayyar, Director of the World Development Report 2026, described AI as a “once-in-a-lifetime opportunity” to solve long-standing development challenges, provided countries invest now in foundational infrastructure, connectivity, skills and institutions.
The bottom line
The World Bank’s report positions AI not merely as another technological wave but as a development accelerator capable of helping emerging economies leapfrog decades of progress. However, it cautions that without urgent investments in digital infrastructure, human capital and governance, AI could deepen inequality and widen the gap between advanced and developing nations instead of narrowing it.