The World Bank has urged developing countries to adopt artificial intelligence (AI) technologies to improve governance and accelerate development, warning that nations that fail to embrace the technology risk falling behind.
Speaking on Tuesday at the launch of the World Bank’s annual World Development Report, the institution’s Chief Economist, Indermit Gill, described AI as a major opportunity for developing economies.
“AI has thrown developing economies a lifeline, and they should seize it,” Gill said.
He noted that countries do not need expensive large-scale AI models or massive data centres to benefit from the technology, but can instead adapt lower-cost AI tools to local conditions to improve services in healthcare, education, agriculture and the justice sector.
The World Bank said developing economies are currently experiencing their weakest average growth in three decades but argued that AI could significantly improve economic performance before the end of the decade.
According to the report, AI has the potential to expand access to critical public services by making medical, legal, educational and agricultural support more accessible to underserved populations.
The Bank observed that many lower-income countries have endured multiple economic shocks throughout the 2020s, describing the period as a “lost decade” for growth. It also noted that its 2026 global growth forecast had been lowered to the weakest level since the COVID-19 pandemic, with recent geopolitical conflicts further weighing on developing economies.
To maximise AI’s benefits, the report urged governments to begin deploying locally adapted AI solutions while investing in electricity infrastructure, expanding access to computing power and improving the availability of local data.
“The window to get this right is narrow,” said Gaurav Nayyar, director of the report.
“AI presents a once-in-a-lifetime opportunity to solve problems that have resisted solutions for generations.”
The report stressed that AI solutions must be designed to meet local realities. In areas with limited internet access or low literacy levels, for example, services should be delivered through voice calls on basic mobile phones rather than relying solely on smartphones.
It also highlighted successful examples of AI in governance, including improving diabetes screening in Bangladesh and helping Indian farmers reduce costs through advanced weather forecasting.
The World Bank warned, however, that governments must build public trust as AI adoption expands. It cautioned that biased AI systems, poor data protection and weak oversight could undermine confidence in public institutions.
The report also warned that AI could widen inequalities between and within countries, concentrate market power, create new risks to privacy and social cohesion, and, over time, threaten middle-class jobs that drive economic mobility if not properly managed.
According to the disclosure accompanying the report, it was prepared with the assistance of several advanced AI models, including those developed by OpenAI, DeepSeek, Google and Anthropic.
