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Artificial intelligence (AI) could help developing economies achieve in a decade what might otherwise take a century, provided governments move quickly to bridge gaps in electricity, internet connectivity, skills and institutional capacity, according to the World Development Report 2026: The Promise of Artificial Intelligence released by the World Bank Group on Wednesday.
The report says AI presents a rare opportunity for low- and middle-income countries to accelerate economic growth at a time when they are experiencing their weakest average growth performance in three decades.
Unlike advanced economies, where AI is expected to replace more jobs, the report finds that developing countries stand to benefit primarily through higher productivity rather than widespread automation.
According to the report, only 4.5 percent of existing jobs in low- and middle-income countries are at risk of automation by generative AI, compared with 14.2 percent in high-income economies. Meanwhile, 16.2 percent of jobs in developing countries could experience significant productivity gains from AI, close to the 18.7 percent projected for richer nations.
“AI has thrown developing economies a lifeline, and they should seize it,” said Indermit Gill, Senior Vice President and Chief Economist of the World Bank Group.
“They do not need large models or massive data centres to reap its benefits. By adapting small, low-cost AI tools to local conditions, they can improve healthcare, education, judicial services and agricultural extension for millions of people,” he said.
Gill, however, warned that governments need to act quickly because AI is spreading much faster than earlier transformative technologies such as electricity and the internet.
The report is the World Bank’s first comprehensive assessment of AI’s impact on developing economies. It finds that AI is already helping governments, businesses and communities improve decision-making, increase efficiency and expand access to essential services.
It says AI-powered tools can assist doctors in diagnosing diseases, help farmers make better crop decisions, improve business productivity and enable governments to strengthen tax administration, disaster response, healthcare delivery, education and social protection programmes.
However, the report cautions that these benefits are not guaranteed.
The most advanced AI technologies are currently concentrated among a handful of countries and technology companies, while many developing economies continue to face shortages of reliable electricity, internet connectivity, computing infrastructure, quality data and skilled workers.
Without targeted investments, AI could widen income gaps, increase inequality, concentrate market power and create new risks related to privacy, governance and public trust, the report warns.
To maximise the benefits, the World Bank recommends a three-stage strategy: first adopting existing AI tools, then adapting them to local needs, and eventually developing more advanced domestic AI capabilities once the necessary foundations are in place.
“The window to get this right is narrow,” said Gaurav Nayyar, Director of the World Development Report 2026.
“AI presents a once-in-a-lifetime opportunity to solve problems that have resisted solutions for generations. Countries that invest now in power, connectivity, skills and institutions will be best positioned to harness AI for their people,” he said.
The report stresses that investment in basic infrastructure remains the top priority.
It notes 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 access. To help address this challenge, the World Bank is supporting the Mission 300 initiative, which aims to provide electricity access to 300 million people across Sub-Saharan Africa by 2030.
The report also calls for greater investment in computing capacity, local-language data and digital infrastructure to ensure AI systems are relevant to local communities. Governments are urged to create an enabling environment for innovation by making it easier for businesses to attract investment, test AI applications and scale successful initiatives.
Building public trust, the report says, will be equally important. It recommends that governments initially rely on voluntary industry standards and international cooperation to promote responsible AI development while using existing legal frameworks to address misuse, protect personal data and prevent bias in public decision-making.
The World Bank concludes that while AI is not a guaranteed solution to development challenges, countries that invest early in the necessary foundations will be better placed to use the technology to boost productivity, strengthen public services and accelerate long-term economic growth.