AI could affect 40% of jobs and widen inequality between nations, UN warns

Artificial intelligence is projected to reach $4.8 trillion in market value by 2033, but the technology’s benefits remain highly concentrated, according to the U.N. Trade and Development agency.

In a report released on Thursday, UNCTAD said the AI market cap would roughly equate to the size of Germany’s economy, with the technology offering productivity gains and driving digital transformation. 

However, the agency also raised concerns about automation and job displacement, warning that AI could affect 40% of jobs worldwide. On top of that, AI is not inherently inclusive, meaning the economic gains from the tech remain “highly concentrated,” the report added. 

“The benefits of AI-driven automation often favour capital over labour, which could widen inequality and reduce the competitive advantage of low-cost labour in developing economies,” it said. 

The potential for AI to cause unemployment and inequality is a long-standing concern, with the IMF making similar warnings over a year ago. In January, The World Economic Forum released findings that as many as 41% of employers were planning on downsizing their staff in areas where AI could replicate them.  

However, the UNCTAD report also highlights inequalities between nations, with U.N. data showing that 40% of global corporate research and development spending in AI is concentrated among just 100 firms, mainly those in the U.S. and China. 

Furthermore, it notes that leading tech giants, such as Apple, Nvidia and Microsoft — companies that stand to benefit from the AI boom — have a market value that rivals the gross domestic product of the entire African continent. 

This AI dominance at national and corporate levels threatens to widen those technological divides, leaving many nations at risk of lagging behind, UNCTAD said. It noted that 118 countries — mostly in the Global South — are absent from major AI governance discussions. 

But AI is not just about job replacement, the report said, noting that it can also “create new industries and and empower workers” — provided there is adequate investment in reskilling and upskilling.

But in order for developing nations not to fall behind, they must “have a seat at the table” when it comes to AI regulation and ethical frameworks, it said.

In its report, UNCTAD makes a number of recommendations to the international community for driving inclusive growth. They include an AI public disclosure mechanism, shared AI infrastructure, the use of open-source AI models and initiatives to share AI knowledge and resources. 

Open-source generally refers to software in which the source code is made freely available on the web for possible modification and redistribution.

“AI can be a catalyst for progress, innovation, and shared prosperity – but only if countries actively shape its trajectory,” the report concludes. 

“Strategic investments, inclusive governance, and international cooperation are key to ensuring that AI benefits all, rather than reinforcing existing divides.”