Artificial intelligence is reshaping economies and societies worldwide, but developing countries risk being left behind in what some analysts call a new era of digital colonialism. A new report from the Center for Strategic and International Studies (CSIS), “An Open Door: AI Innovation in the Global South amid Geostrategic Competition,” examines how low- and middle-income countries (LMICs) can harness AI’s benefits while navigating the U.S.-China rivalry.
The stakes are high. By 2030, AI is expected to add nearly $20 trillion to the global economy, yet current trends suggest the Global South will capture only a fraction of that value. Latin America, Africa, and parts of Asia are projected to share less than 20 percent of the economic gains, while the United States, China, and Europe dominate investment, research, and talent pipelines. This imbalance has fueled debates about whether open-source AI models can help close the gap—or whether they expose new vulnerabilities.
CSIS researchers note that open models like Meta’s Llama and Mistral reduce barriers by lowering costs and enabling local adaptation. Innovators across Africa, Latin America, and Southeast Asia are already fine-tuning open systems to reflect local languages and cultural contexts. These efforts could support sovereign AI ecosystems, reducing dependence on foreign technologies. At the same time, critics warn that transparency in open systems can empower malicious actors and accelerate cyber threats.
For developing countries, the geopolitical context adds another layer of complexity. U.S. export controls, initially tightened under President Biden and partly relaxed under President Trump, aim to curb China’s access to advanced semiconductors. But these measures can also restrict LMICs seeking affordable access to AI infrastructure. China, meanwhile, is offering its own digital frameworks through initiatives like the Digital Silk Road, positioning itself as an alternative tech partner.
Despite these challenges, AI innovation hubs are emerging. Kenya and Nigeria are investing in AI training centers and partnering with global firms to apply machine learning to agriculture, healthcare, and education. The African Union has launched a Continental AI Strategy, calling for shared regional data pools and inclusive governance frameworks. Proposals such as the Africa AI Fund, which aims to inject $60 billion into the continent’s digital ecosystem, reflect growing ambition but also underline the steep costs involved.
The CSIS report urges the United States to strengthen partnerships with LMICs through four steps: promoting good governance and democratic AI regulation, sharing private-sector expertise, encouraging responsible open-source adoption, and mobilizing investment in infrastructure and human capital. Analysts argue that reframing relationships around collaboration and co-development will be critical if AI’s transformative potential is to support inclusive growth rather than deepen global divides.
As the U.S. and China compete for influence, LMICs face difficult choices. The outcome of these decisions will not only shape their digital futures but also redefine the balance of technological power worldwide.
Need Help?
If you’re concerned or have questions about how to navigate the AI regulatory landscape, don’t hesitate to reach out to BABL AI. Their Audit Experts can offer valuable insight and ensure you’re informed and compliant.
