Despite the pace of artificial intelligence (AI) taking off globally and governments trying to lead in the technology, inequality between countries could deepen without strong policy action, creating what researchers call "The Next Great Divergence," according to a United Nations report.
The report, published by the UN’s Development Programme (UNDP) on Tuesday, warned that unmanaged AI could reverse the trend of narrowing development inequalities that has marked much of the last half-century.
In an urgent call, it said that AI adoption is happening in months rather than decades and that many countries lack the infrastructure, skills, and governance systems needed to capture AI’s benefits while also facing economic and social disruptions from the technology.
"The central fault line in the AI era is capability," said Philip Schellekens, UNDP’s chief economist for Asia and the Pacific region. "Countries that invest in skills, computing power and sound governance systems will benefit, others risk being left far behind."
The report focused on the Asia-Pacific region, saying that because it is home to over 55 per cent of the world's population and has diverse national incomes and the widest life expectancy gaps, it serves as “ground zero” for these dynamics.
Despite hosting more than half of global AI users, only 14 per cent of people in the region actually use AI tools, leaving 3.7 billion on the sidelines. Meanwhile, a quarter of the population remains offline, with women in South Asia up to 40 per cent less likely than men to own a smartphone.
However, the report said the region is rapidly expanding in AI and innovation, pointing to China, which has almost 70 per cent of AI patents. More than 3,100 newly funded AI companies have emerged across six economies.
Countries such as Singapore, South Korea, and China are making substantial investments in AI infrastructure and skills, while others are still working to strengthen foundational digital access and literacy, the report said.
AI could raise annual gross domestic product (GDP) growth in the region by around 2 percentage points and raise productivity by up to 5 per cent in sectors such as health and finance. ASEAN economies alone could see nearly $1 trillion (around €87 billion) in additional GDP over the next decade.
Despite this, some 1.3 billion workers remain in informal employment, nearly 770 million women are out of the labour force, and about 200 million people live in extreme poverty, the report read.
Women and youth most at risk
The report said that women and young people are most vulnerable to AI's disruptions. This is mostly because jobs held by women are nearly twice as exposed to automation as those held by men.
Youth employment is already declining in high-AI-exposure roles, especially for those aged 22 to 25, threatening early-career pathways, the report warned.
There is also a high risk of AI systems and algorithms projecting bias to rural and indigenous communities, as they are often not visible in the data systems that train AI systems.
The report found that AI-driven credit models are trained mainly on urban male borrowers and have misclassified women entrepreneurs and rural farmers as high-risk, excluding them from financial opportunities.
One in four companies also expects job losses linked to AI-driven automation. Only one in four urban residents—and fewer than one in five rural residents—can complete basic spreadsheet tasks, the report said.
The digital divide
The report said that while AI could be an opportunity for humanity, for example, by detecting diseases faster, supporting literacy, and strengthening food systems, some things remain out of reach.
More than 1.6 billion people in the Asia-Pacific region cannot afford a healthy diet and 27 million youth remain illiterate.
Meanwhile, many countries depend on imported AI models and languages that don't reflect their cultural or linguistic realities.
For economies, digital skill shortages remain severe, informality is widespread, and gains from AI remain uncertain and uneven across different countries and sectors, the report warned.
AI in governance
While the report noted that AI can help governments and public services, such as helping with flood forecasting or AI credit scoring, only a limited number of countries have comprehensive AI regulations.
By 2027, more than 40 per cent of global AI-related data breaches may stem from misuse of generative AI, underscoring the need for robust governance frameworks, the report warned.
European findings
While the report focused on Asia-Pacific, there was research from Europe and North America too, which showed wide disparities across the bloc.
European data showed that there were certain countries, such as Denmark, Germany, and Switzerland, which were among the world’s top performers when it comes to AI preparedness.
But Eastern European countries such as Albania and Bosnia and Herzegovina lag significantly behind their Western counterparts.
Not inevitable
The report said that the widening AI inequalities are not predetermined.
"AI is racing ahead, and many countries are still at the starting line," said Kanni Wignaraja, UN Assistant Secretary-General and UNDP’s regional director for Asia and the Pacific.
"The Asia and Pacific experience highlights how quickly gaps can emerge between those shaping AI and those being shaped by it."
