The World Bank has urged developing countries to embrace artificial intelligence (AI) as a tool for accelerating development and improving governance, warning that nations that fail to adopt 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 transformative opportunity for emerging economies.
“AI has thrown developing economies a lifeline, and they should seize it,” Gill said.
He noted that low- and middle-income countries do not need expensive AI models or massive data centres to benefit from the technology, urging governments to adapt affordable AI solutions to local needs in sectors such as healthcare, education, agriculture and justice.
According to the report, AI has the potential to significantly improve growth prospects for developing economies, many of which are experiencing their weakest average economic performance in three decades.
“AI could significantly boost that performance before the end of the 2020s while delivering tangible benefits to people,” the report stated.
The World Bank said AI could help expand access to essential public services, enabling governments to provide healthcare, legal assistance, education and agricultural support to underserved populations more efficiently.
The report comes as many low-income countries continue to grapple with multiple economic shocks throughout the decade. Earlier this year, the World Bank described the 2020s as a “lost decade” for economic growth in many developing economies.
It also recently lowered its 2026 global growth forecast to its weakest level since the COVID-19 pandemic, citing the economic impact of the Iran war and broader global uncertainties, with developing economies—particularly those in Asia—bearing the brunt of the slowdown.
To maximise the benefits of AI, the World Bank urged governments to invest in electricity generation and distribution, expand access to computing infrastructure and improve the availability of locally relevant data.
“The window to get this right is narrow,” said Gaurav Nayyar, one of the report’s lead authors.
“AI presents a once-in-a-lifetime opportunity to solve problems that have resisted solutions for generations,” he added.
The report noted that AI solutions must be tailored to the realities of the 6.8 billion people living in low- and middle-income countries rather than simply importing technologies developed elsewhere.
It cited examples of AI being used to improve diabetes screening in Bangladesh and provide advanced weather forecasting for farmers in India, helping to reduce production costs and improve agricultural outcomes.
The World Bank stressed that successful AI deployment would require solutions adapted to local conditions, including voice-based services accessible through basic mobile phones for users who cannot read or afford smartphones.
“Simply importing an AI model does not mean it will work well locally,” the report said.
The institution also urged policymakers to build public trust by ensuring AI is deployed responsibly, warning that misuse of the technology could undermine confidence in public institutions.
“Improved public services and better learning outcomes in schools will reinforce trust. But if AI embeds bias in government decisions or erodes data privacy, that trust will be difficult to recover,” the report stated.
The World Bank further cautioned that AI could widen inequalities between and within countries, concentrate economic power, weaken public trust and create new risks for safety, human rights and social cohesion if not properly governed.
Although the report said the immediate threat to employment in developing countries remains limited, it warned that widespread AI adoption could eventually eliminate many middle-income jobs that traditionally drive economic mobility.
According to the World Bank, the report itself was prepared with support from several advanced AI systems developed by OpenAI, DeepSeek, Google and Anthropic.
