AI and the Global Economy: Growth or a New Divide? The divide runs not only across economies but also through labour markets. WTO estimates that wages may rise overall, yet service-sector workers, especially in developing countries, face the greatest disruption

Artificial intelligence is often hailed as the great equaliser of the 21st century. Yet, according to the World Trade Organization's (WTO) World Trade Report 2025, its impact could cut two ways: lifting global GDP significantly while also widening the economic gap between nations if action is not taken.

By 2040, AI is projected to increase global GDP by 12 to 13 per cent and expand trade in goods and services by nearly 40 per cent. WTO Deputy Director General Johanna Hill said that this trade-led growth would be a vital lifeline at a time when geopolitical tensions, supply chain disruptions, and protectionist policies are reshaping the global order.

But the growth will not be shared equally unless countries invest in digital infrastructure and skills.

The divide widens

For high-income countries, the outlook is particularly strong. In a scenario where technological divides persist, their income levels could rise by 14 per cent by 2040, compared to 11 per cent for middle-income economies and just 8 per cent for low-income ones.

This uneven distribution of gains underscores the risk of an "AI divide." If lower-income economies lack the infrastructure and policies to integrate AI, they risk being left further behind.

However, if low-income economies improve digital infrastructure and expand AI adoption, their GDP gains could jump dramatically, up to 15 per cent compared to 14 per cent for middle-income economies and 12 per cent for high-income ones. In other words, catching up is possible, but only with deliberate effort.

The human side of the divide

The divide is not just across economies, it runs through labour markets as well. The WTO estimates that the global "skill premium" (the wage gap between high-skilled and low-skilled workers) could shrink by 3–4 per cent. At first glance, this looks like a good thing, suggesting more equality. But the reality is more complicated. AI is replacing tasks in many medium- and high-skilled jobs, which reduces demand for those roles.

This sets up a paradox. While wages are expected to rise across all groups, many workers, especially in service sectors, will face job disruption. For developing countries, this is even riskier. Services like transcription, translation, and call center, which have been key growth opportunities, could either become more competitive with AI or be completely wiped out.

Education is the critical tool to prepare workers for this shift. Yet, here too, the divide is sharp. Less than one-third of developing nations have national AI education strategies in place, while wealthier countries are already weaving AI into classrooms, research, and skill-building programs.

Industry reactions

Addressing concerns about AI replacing tasks in many medium- and high-skilled jobs, Manish Jha, CTO of Addverb, highlighted the role of IITs in bridging the skills gap. "IITs are actively adapting to the AI era. Curricula are being redesigned to embed AI literacy across disciplines, with projects, internships, and industry collaborations."

Ankush Sabharwal, Founder and CEO of CoRover, argued that engineers are central to this transformation. "Engineers in this age of AI are in the driver's seat of transformation. Rather than replacing them, AI frees them from mundane tasks, allowing focus on critical thinking, system design, and innovation. Their skills remain the backbone of industries deploying AI at scale."

Referring to Nasscom and BCG's latest AI Adoption in India Report (2025), he added that over 92 per cent of enterprises now prioritise AI skills in hiring, across product management, analytics, and leadership. "IITs need to embed these into structured, outcome-driven learning to anchor India's AI leadership."

Chaitra Vedullapalli, Co-founder of Women in Cloud said, "The future belongs to engineers who can bridge domain expertise with distribution, proving ROI and turning technology into revenue. If IITs evolve into launchpads that enable students to build, ship, and scale with modern curricula, industry co-ops, and founder-friendly spinouts, India will own the stack."

Looking ahead

The WTO report stresses that the next decade is a "moment of strategic choice." With the right investments in infrastructure, education, and cooperation, AI could narrow divides, expand opportunities, and strengthen the multilateral trading system.

But without action, the risks are clear. Benefits could remain concentrated in high-income economies, leaving lower-income countries locked into long-term inequalities. International cooperation on AI is still embryonic, focused largely on ethics and safety, with little direct attention to trade. That must change.

AI is on track to become one of the most powerful drivers of global GDP in decades. The question now is whether it will be a rising tide that lifts all boats or a current that pulls some further behind.