World Bank: Developing Nations Risk Missing AI Boom After Decade of Crises

Developing economies face AI disadvantage after crisis-filled decade

The world's poorest countries are entering the artificial intelligence era severely weakened by successive global shocks, positioning them to miss out on what could be a transformative economic cycle, according to a new World Bank analysis.

World Bank economists conclude that the COVID-19 pandemic, the Ukraine conflict, and the ongoing Iran war have hit developing nations particularly hard, leaving them burdened with debt, diminished investment capacity, and years of stalled progress. This comes at a critical juncture as AI begins to reshape global economic dynamics.

Why it matters

The timing creates a dangerous divergence: wealthy nations with existing digital infrastructure can leverage AI for productivity gains, while developing countries lacking basic computing capacity risk falling further behind. This threatens to reverse decades of progress in closing the global prosperity gap.

Growth forecasts decline amid immediate pressures

The World Bank has revised its global growth projection downward to 2.5% for this year, down from 2.9% in 2025. If the Iran conflict's economic ripple effects persist long enough to destabilize financial markets, growth could decelerate further to just 1.3%.

For emerging market and developing economies specifically, the bank forecasts growth will slow to 3.6% this year, with per capita income growth marking the weakest performance since the pandemic.

Infrastructure gap threatens AI participation

The structural challenges facing developing nations are stark. According to the World Bank report, developing economies control less than one-quarter of global data center capacity. The disparity becomes even more pronounced at the bottom: the world's 24 poorest economies account for less than one-tenth of one percent of this critical infrastructure.

Beyond physical computing resources, these countries also lack sufficient technical expertise and local-language data sets necessary to deploy AI effectively. Without these foundational elements, the technology's benefits remain largely inaccessible.

A lost decade, but hope for the 2030s

"The first half of the 2020s are now behind us, and it is possible that this decade might already be lost. But the 2030s are not," World Bank chief economist Indermit Gill wrote in the outlook.

Gill identified powerful economic forces gathering strength—including AI adoption, clean energy investment, and deeper regional trade integration—that could unlock significant progress in the coming decade. The bank's longer-term projection suggests these factors could deliver the most prosperous decade since the 1970s.

However, Gill cautioned that "the AI revolution could widen rather than narrow the gap between rich and poor countries" if developing economies cannot establish the conditions needed to harness the technology.

The challenge ahead

The World Bank's analysis presents a dual reality: repeated crises have already extracted a heavy toll on developing nations' progress, yet the next decade offers genuine opportunity for reversal. The critical variable is whether countries weakened by the 2020s can still marshal the resources and policy frameworks needed to participate in the AI-driven growth cycle.

These details were first reported by Axios in their AI Watch coverage.