World Bank Says AI Is a 'Lifeline' for Developing Economies in Weakest Growth Decade

The World Bank has called on developing countries to embrace artificial intelligence, arguing that the technology offers a "lifeline" for economies mired in their weakest average growth performance in three decades. In its annual World Development Report, launched on Tuesday, the institution warned that nations which fail to adapt risk being left behind, while those that move quickly could compress a century of development into a single decade. The report reframes the global AI conversation, which has fixated on frontier models and data centers, toward the cheaper, localized tools that the Bank believes can transform health, education, justice, and agriculture for billions. For the latest AI industry coverage, the report is a significant policy intervention at a moment when governments are drafting AI rules worldwide.

A stark growth backdrop

The report arrives at a grim economic moment. According to the World Bank's own statement and reporting by Reuters and Digital Journal, developing economies are in the midst of their weakest average growth performance in three decades. The Bank earlier this year described the current period as a "lost decade" for low-income countries, which have been hit by a series of successive shocks.

The institution has lowered its 2026 global growth forecast to its lowest level since the pandemic, citing the economic fallout of the Iran war, which has battered countries around the world. Low-income and developing countries have been hit hardest, with Asia the worst-affected region. Against that backdrop, the report argues that AI could significantly boost growth performance before the end of the 2020s while delivering tangible benefits to people.

No big models required

One of the report's central messages is that developing countries do not need frontier-scale models or massive data centers to benefit from AI. Indermit Gill, chief economist of the World Bank Group, put it bluntly: "AI has thrown developing economies a lifeline, and they should seize it. They do not need large models or big data centers to reap its benefits."

That framing matters because it challenges the assumption, common in wealthy economies, that meaningful AI deployment requires billions in compute investment. The Bank argues that adapting existing, lower-cost AI tools to local conditions can deliver results in health, education, justice, and agriculture. The report calls for countries to use AI to "help extend otherwise costly medical, legal, educational, and agricultural services to underserved billions, doing in a decade what might otherwise take a century."

Real-world examples

The report grounds its optimism in concrete use cases. It cites AI applications that have already shown results in developing-country contexts, including increasing diabetes screening volumes in Bangladesh and reducing costs for Indian farmers through advanced weather forecasts. These examples illustrate how relatively simple AI tools, layered on existing infrastructure, can extend services that are otherwise prohibitively expensive to deliver at scale.

The report stresses that solutions must meet people where they are. "For example, AI solutions will need to be delivered through voice calls on basic mobile phones for those who cannot read or afford smartphones," it notes. That practical lens is a deliberate counterpoint to AI strategies that assume high-bandwidth connectivity and smartphone access as starting conditions.

The investment agenda

Beyond adoption, the report lays out a three-part investment agenda for developing-country governments: invest in electricity generation and distribution, expand access to computing power, and improve the availability of local data. Each is a precondition for making AI useful in practice. Without reliable power, compute is meaningless; without local data, models cannot serve local needs; without affordable compute access, even the best tools are out of reach.

Gaurav Nayyar, director of the report, struck a note of urgency. "The window to get this right is narrow," he said. "AI presents a once-in-a-lifetime opportunity to solve problems that have resisted solutions for generations."

The numbers at stake

The scale of the population involved gives the report its weight. Roughly 6.8 billion people, about 83 percent of humanity, live in low-income and developing countries. For them, the report argues, AI tools will need to be adapted to meet specific local needs rather than simply exported from wealthy economies. The implication is that the global AI industry's current center of gravity, concentrated in a handful of wealthy nations, is leaving the vast majority of the world underserved.

That gap is not just an economic concern; it is a governance and equity challenge. The Bank's report positions AI access as a development issue on par with electrification or internet connectivity, framing the technology as infrastructure that governments have a responsibility to build out.

Trust and risk

The report is not unreservedly optimistic. It devotes significant attention to the risks of getting AI deployment wrong, particularly around public trust. "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 accompanying statement warned.

The report's authors are candid that AI could deepen inequality rather than narrow it. "AI could widen gaps between countries, increase inequality within them, concentrate market power, weaken trust in public institutions, and create new risks for safety, rights, and social cohesion," it states. That caution is notable coming from an institution historically focused on growth, and it signals that the Bank sees governance as inseparable from adoption.

The call to build public trust as AI expands reflects lessons from previous technology rollouts, where gains in efficiency were undermined by public backlash over privacy and bias. The report urges policymakers to be deliberate about transparency and accountability as they scale AI in public services.

What comes next

The World Development Report does not bind any government, but it carries weight in shaping how development agencies, multilateral lenders, and national policymakers frame AI strategy. Its emphasis on low-cost, localized tools, rather than frontier model competition, could redirect some funding toward applications that serve the majority of the world's population.

Whether developing countries can act on the recommendations quickly enough is an open question. The Bank itself concedes the window is narrow, and the same economic weakness that makes AI appealing also limits the fiscal room to invest in the power, compute, and data infrastructure the report calls for. For now, the report stands as the most prominent official argument yet that the global AI boom should not be measured only by what happens in Silicon Valley, but by whether it can reach the billions who have the most to gain.

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