Artificial intelligence (AI) is on track to become one of the most transformative technologies of the 21st century, with its market value expected to surge to $4.8 trillion by 2033, nearly the size of Germany’s economy. This staggering growth, as outlined by the United Nations Conference on Trade and Development (UNCTAD), is set to drive productivity gains and contribute significantly to digital transformation across industries. However, this anticipated boom raises serious concerns, particularly regarding its potential to exacerbate existing inequalities and lead to significant job displacement on a global scale.

According to the UNCTAD’s latest report, while the global AI market is poised for rapid growth, the benefits of this technological revolution remain highly concentrated in certain regions and sectors. The report highlights that over 40% of global corporate research and development (R&D) spending in AI is concentrated among just 100 firms, primarily based in the United States and China. This concentration of resources in a handful of countries and companies threatens to deepen the technological divide, leaving many nations, particularly in the Global South, at risk of falling behind in the AI race.

One of the most pressing concerns raised in the report is the impact of AI on the global job market. The UNCTAD warns that automation driven by AI could affect up to 40% of jobs worldwide, displacing millions of workers and further exacerbating economic inequality. The fear is that AI-driven automation will disproportionately benefit capital over labor, widening the income gap and reducing the competitive advantage of low-cost labor in developing economies. This trend could ultimately lead to a more divided world, with developed nations reaping the lion’s share of AI benefits while others are left struggling to adapt.

The concerns about job displacement are not new. For example, a year ago, the International Monetary Fund (IMF) raised similar alarms, stressing that AI could lead to widespread job losses in certain sectors. In January, the World Economic Forum reported that 41% of employers were planning to downsize their staff in areas where AI could potentially replicate their tasks. These warnings point to the need for proactive measures to mitigate the risks of job displacement and ensure that the benefits of AI are more evenly distributed.

Another critical issue highlighted by UNCTAD is the lack of inclusivity in the development and implementation of AI technologies. The report underscores the fact that major tech giants, such as Apple, Nvidia, and Microsoft, which are positioned to profit from the AI boom, have market valuations that rival the GDP of entire continents, including Africa. This concentration of power and influence in the hands of a few corporations and nations only increases the risks of inequality and limits the opportunities for countries that are not part of the AI innovation hubs.

In addition to the economic challenges posed by AI, the UNCTAD report also stresses the importance of global governance in shaping the future of AI. The report points out that many developing countries—especially those in the Global South—are absent from crucial AI governance discussions. These nations must be included in the development of AI ethical frameworks and regulations to ensure that AI's growth is inclusive and beneficial for all countries, not just the few that dominate the field.

However, AI is not solely a force for disruption. The report also acknowledges the potential for AI to create new industries, empower workers, and drive innovation. But for this potential to be realized, significant investment in reskilling and upskilling is necessary. UNCTAD advocates for strategic investments in human capital, particularly in developing countries, to ensure that workers are prepared for the future AI-driven economy

The report concludes with a call to action for international cooperation and inclusive governance. It recommends the creation of an AI public disclosure mechanism, shared AI infrastructure, and the use of open-source AI models. These initiatives would allow for the sharing of knowledge and resources, making AI more accessible to all nations and helping to close the technological divide. UNCTAD stresses that for AI to be a catalyst for progress, it is essential for countries to actively shape its trajectory through strategic investments, inclusive governance, and collaboration on a global scale.

While AI offers immense potential for economic growth and technological advancement, it also presents significant challenges, particularly in terms of inequality and job displacement. The UNCTAD report calls for a balanced approach that emphasizes both the opportunities and risks associated with AI. By ensuring that all nations have a seat at the table in shaping AI’s future, the world can harness the benefits of this transformative technology while mitigating its negative impacts on global inequality.