AI’s rapid development will change emerging markets. Mobile World Congress 2025 in Barcelona, Spain (Photo by Marc Asensio/NurPhoto via Getty Images)
NurPhoto via Getty Images
In 2025, artificial intelligence underwent a transformative shift from scientific advancement to practical economic force multiplier. As technological capabilities developed, AI use rose exponentially. Much of the discourse around the new technology focuses on the major players and their political struggles. China and the U.S. see AI in geopolitical terms, as a tool to transform their military capabilities and shape the international order. AI is also defining great power rivalries and is increasingly embedded in the national security policies of countries large and small around the world. Emerging markets are facing a major challenge in dealing with articifial intelligence.
For energy-rich countries hoping to diversify, energy-hungry AI is a path to further growth and create value-added exports as well as increasing the efficiency of their money-making energy sectors. Countries struggling with the middle-income trap see AI as part of the solution for their development woes. Technologically advanced states with less competitive exports due to aging populations see AI as an efficiency booster that can help circumvent inflated wages and at least partially help compensate for declining populations. AI is also a technology that many developing states are embracing in the hope that it will allow them to leapfrog over their problems.
We took a look at a few case studies that are struggling with the quick advancement of the AI era, to learn what the new tech is doing to developing countries with GDPs from $2,305 (Kenya) to $30,000 (Saudi Arabia).
Brazil: Same Old Dreams of Autarky
Latin America has begun to position itself within the AI landscape. The region’s largest economy, Brazil, with per capita GDP of $10,816 is developing a national AI strategy that emphasizes inclusivity and sustainable development. Under President Luiz Inacio Lula da Silva (80), AI is being furthered to create new jobs and manage data. Under his government’s Brazilian Artificial Intelligence Plan, officially published this past summer, over $4 billion in investment is to be spread over the next four years. In a similar vein to Saudi Arabia (see below), Brazil is attempting to transition towards technological autonomy by promoting regional development and job creation in the sector. This may be a first step towards attracting cross-border investment, remaining cautious when collaborating with current AI leaders.
Highlighting technology transfer rather than dependency is a significant part of the plan, the idea being to decrease reliance on China and/or the U.S. and boost Brazil’s strength in the global AI landscape by promoting autonomy and participation from the Global South in the sector. As with prior attempts to develop autarkic economies, this plan is likely to fail. The country simply lacks the science and technology critical mass to pull it off on its own.
Kazakhstan: New AI Kid on the Block
Nur-Alem Sphere, site of Kazakhstan’s Artificial Intelligence Center in Astana
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A new player in the AI field is the Central Asian region, specifically Kazakhstan, with a GDP per capita of $14,770, surpassing both Russia and China. Unlike Saudi Arabia’s integration into the AI realm harnessing massive budgetary resources, Kazakhstan is using its position as a key part of the Middle Corridor between the East and the West to negotiate partnerships with major powers, including China and the U.S. Capitalizing on current tensions between Washington and its near-peer competitors Moscow and Beijing, Kazakhstan has made significant efforts to move beyond its traditional extractive industries. From President Kassym-Jomart Tokayev’s UNGA meetings with key American businesses to over $3 billion in investments from major tech companies such as NVIDIA and Oracle, Kazakhstan, boasting its indigenous fintech, is becoming a tech leader seeking to gain leverage in this new sector. More deals, amounting to $17 billion, were announced when Kazakhstan participated in the C5+1 summit in Washington, D.C., on November 6, where President Tokayev also proclaimed his country joining the Abraham Accords. The nation has a relatively highly trained workforce capitalizing on the Soviet-era advanced STEM education and the geographic advantage of serving as a convening point for technological collaboration among current industry leaders.
Kenya: The Great Leap Forward?
Often referred to as the “Silicon Savannah,” Nairobi has emerged as a growing tech ecosystem and AI hub in Africa. This year, Kenya, with a GDP per capita of only $2,305, published its own National AI Strategy, outlining policies and development for AI over the next five years. Both Microsoft and Huawei have invested in the region to expand cloud computing services and AI infrastructure. As reflected in these investments, both the U.S. and China are engaged in a digital race for Africa and are attempting to assert influence on the quickly developing continent. Africa, for now, is seeking technological leapfrogging and is still dependent on others’ tech advancements. These investments demonstrate the role of AI as a geopolitical tool in the global Sino-U.S. competition, as both Huawei and Microsoft’s investments target not only the development of AI models but also the construction of infrastructure such as data centers, the promotion of connectivity, and are dependent on government cooperation for implementation.
Saudi Arabia: Silicon, Not Sand for the New AI Kingdom
Dr. Lilac Al Safadi, speaking at the INSIDE THE AI REVOLUTION: RISK, REWARDS AND NEW WAYS OF WORKING talk at the Fortune Most Powerful Women International Summit Riyadh 2025. (Photo by Amal Alhasan/Getty Images for Fortune Media)
Getty Images for Fortune Media
Saudi Arabia’s integration of AI into its national agenda encapsulates the shift AI has imposed on the strategic developmental priorities of a number of upper middle- and high-income countries. As a major oil producing nation transitioning away from a purely hydrocarbon play, under Vision 2030, Saudi Arabia, with a GDP per capita of over $30,000, has highlighted the use of AI as a key component in building a diversified, higher-value economy, hoping to make digital technology a key vector of cooperation with the United States, as was highlighted in the recent visit by Crown Prince and Prime Minister Mohammad bin Salman’s to Washington, D.C.
Institutions such as the Saudi Data and AI Authority (SDAIA) have been established to plan and build data infrastructure and domestic research and development capabilities, in the future attracting potential global investors and partnerships. AI is not solely a means of technological advancement for the Kingdom, seeking to act as a hub for future data industries, but also a way to establish strategic autonomy through volatile Middle East/Gulf region.
Energy and Climate as Barriers to AI Development
AI’s rise does not come without obstacles, especially in the developing world. In emerging market nations such as Saudi Arabia and Kenya, limiting factors include talent gaps. Building talent pools and educating a 21st century AI workforce to leverage new knowledge technologies will take considerable time, require external actors from the private, multi-lateral, and state sectors, and may result in a temporary lag behind other nations that excel in AI talent development.
Environmental factors are also a key impediment, as AI infrastructure requires significant energy and water. The climate constraints of these countries may complicate sector growth or increase the costs of development. Especially troubling are water shortages in desert climates, including in Kazakhstan and Saudi Arabia. Energy scarcity for the air conditioning and water cooling needed for AI data centers, and the sheer amount of energy for data processing may not be currently found even in oil exporters such as Brazil, Kazakhstan, and Saudi Arabia. These countries may need nuclear reactors, natural gas power stations and massive renewables projects, including sun (KSA, Kenya, Kazakhstan) and wind (Kenya, Brazil), with concomitant industrial battery storage facilities to build out the sector.
The expansion of AI in 2025 has begun a reordering of global partnerships and economic dynamics, and may facilitate the rise of emerging market countries as middle powers. AI governance is on the radar of powers across the world, and is becoming a topic of importance in international bodies like the UN. “Technological leapfrogging” is being planned in less advanced nations to bypass the usual stages of development and accelerate their path to becoming AI-capable as the technology is integrated into an ever-growing list of industries and functions. As this year ends, AI has made it clear that it is more than just a technological fad and has the potential to significantly boost emerging markets’ development and change the global order in the coming years.
Source: https://www.forbes.com/sites/arielcohen/2025/11/30/2025-ai-transforms-emerging-markets-worldwide/