The World Bank’s Digital Progress and Trends Report 2025: Strengthening AI Foundations shows that AI is gaining momentum in developing countries and driving opportunities for growth, but progress remains uneven, with gaps in access and capacity that demand urgent attention.
AI is gaining momentum in developing countries
Middle-income countries are rapidly becoming active GenAI users. In mid-2025, more than 40% of ChatGPT’s global traffic originated in middle income countries—led by Brazil, India, Indonesia, and Viet Nam. Globally, GenAI vacancies surged 9-fold from 2021-2024, with one in five of these GenAI jobs in middle income countries. These data signal the potential for developing countries to build skilled AI workforces and strengthen their positions in the global digital economy.
Yet gaps remain as AI innovation, adaptation and adoption evolve unevenly
But many disparities are stark: high-income countries account for 87% of notable AI models, 86% of AI start-ups, and 91% of venture capital funding—despite representing just 17% of the global population. This concentration of innovations poses adaptation challenges for middle- and low-income countries, but open-source technologies are helping democratize AI participation—allowing developing countries to tailor solutions to local contexts without reinventing foundational technologies.
High-income countries also dominate the physical backbone of the digital economy, hosting 77% of global co-location data center capacity as of June 2025. In contrast, upper-middle-income countries hold 18%, lower-middle-income countries just 5%, and low-income countries less than 0.1%.
Despite disparities, local, lightweight AI—"small AI”—is already making big impact
Affordable, accessible “small AI” applications are already delivering real impact in developing economies. Designed to run on everyday devices and without needing major underlying digital infrastructure, these tools are improving lives and livelihoods—from helping doctors analyze health data to enabling small businesses to reach new customers. These kinds of ground-up innovations can allow countries to leapfrog traditional barriers and harness AI’s benefits today.
Strengthening the foundations: The “Four Cs”
To fully realize AI’s potential, countries must invest in four key elements—the “Four Cs”:
- Connectivity – Affordable, reliable internet access is the gateway to AI participation. While 93% of people in high income countries use the internet, only 54% in lower-middle-income and 27% in low-income countries do.
- Compute – AI’s transformative power depends on computing resources. But middle- and low-income countries hold only 23% of the global data center capacity.
- Context – AI must reflect local languages, data, and realities. Most training data remains English-dominated, but new formats such as video and audio offer developing countries new opportunities to participate.
- Competency – AI readiness depends on digital literacy and advanced skills. Less than 5% of the population in low-income countries have basic digital skills, compared with 66% in high income ones.