India must embrace "small AI" to boost productivity and avoid job losses, World Bank President Ajay Banga said in Davos, warning that global AI systems dominated by the West could sideline emerging economies.
Speaking to NDTV CEO and Editor-in-Chief Rahul Kanwal on the sidelines of the World Economic Forum, Banga cautioned against viewing artificial intelligence solely through the lens of large language models (LLMs) and big-data generative systems. "Most people are discussing AI from the LLM generative side. But that needs lot of computing power, electricity, massive data, and skilled people to manage it," he said.
"Outside the developed world, other than maybe India and China, very few countries have that combination."
Banga stressed that India faces infrastructure challenges, especially in power, but argued that it remains one of the few non-Western nations with the potential to build its own AI ecosystem.
"India has its own rules. Data is the new oil," he said, pointing to localized, small-scale AI applications that are already transforming lives in states like Uttar Pradesh.
He recalled witnessing a farmer cooperative where farm women used mobile phones to diagnose crop diseases using image recognition tools. "That's small AI, locally delivered, running on phones with local compute, and it's being used in agriculture, healthcare, and education," he said.
Banga warned that if the AI conversation remains fixated on large Western systems, "we will lose the hearts and minds of emerging markets," where small AI can deliver immediate economic benefits without threatening jobs.
While he noted that big AI might slow hiring in white-collar sectors in the West, he emphasized that such impacts haven't yet triggered mass layoffs. In contrast, he framed small AI as a clear win for countries like India: "It is a productivity enhancer with no negative job consequences, only positive."
