Building Data Infrastructure for AI Readiness

Development Challenge

Many countries lack the "four Cs" for AI readiness- connectivity (and reliable power), compute (data centers and secure cloud), context (quality data), and competency (skills). As a result, promising AI pilots rarely scale responsibly. Persistent gaps in infrastructure, talent, and data, coupled with weak data protection, cybersecurity, and regulation, amplify risks of privacy breaches, bias, and misuse - threatening to widen the digital divide rather than close it.

World Bank Group Approach

The World Bank Group uses the comparative advantages of each institution (IBRD, IFC, and MIGA) to join forces to develop reliable, affordable data infrastructure. The framework expands access to global and local infrastructure to accelerate government modernization, unlock AI and innovation ecosystems, and grow local data/AI industries.

IFC catalyzes market development through debt and equity for data center operators, capital market transactions, and advisory services to crowd in investment.

IBRD enables governments to become strong demand anchors in emerging markets. It supports policy and regulatory reforms while also providing concessional financing for the use of commercial data centers and cloud services. With structured long-term commitments, governments could signal credible market demand, helps de-risks and catalyze investments in these markets.

MIGA mitigates risk via political risk insurance and guarantees, including long-term service purchase commitments by anchor clients that provide predictable demand and reduce entry risk for investors.

Results

A joint World Bank Group study assessed market potential, infrastructure, policy, risk, and financing conditions across 15 priority countries, identifying coordinated interventions across IBRD, IFC, and MIGA to accelerate cloud and data center market development.

Romania: With IBRD support, the government is migrating up to 60 applications to the cloud, including electronic payment systems, public procurement platforms, and early warning systems, backed by a new regulatory and policy framework to guide the transition.

Malaysia: IFC partnered with hyperscale operator Yondr to derisk the construction of a new data center in Johor Baru (subsequently acquired by Vantage Data Centers) through early-stage financing that was not available from commercial lenders, catalyzing strong market interest and mobilized additional commercial financing. The 300MW, 72.5-acre campus will be among the largest in emerging markets, positioning Malaysia as a regional digital infrastructure hub. Once operational, the campus is expected to attract further digital investment into the region, create local jobs, strengthen Malaysia's data sovereignty, and generate spillover benefits across Southeast Asia, cementing Malaysia's position as a leading hub for digital infrastructure in emerging markets.

Contribution to World Bank Group Targets and Jobs

Cloud and data center development contributes to minimizing upfront technology costs for small businesses, expanding markets and boosting productivity, catalyzing productivity-driven job creation. It also advances WBG targets: more secure, accessible digital services for people and governments; and stronger regulations that attract private investment. The program contributes to the Corporate Scorecard's "digitally enabled services" and backs IDA21 commitments on digital public infrastructure, cybersecurity, data protection, and inclusive broadband.

Lessons Learned

While both infrastructure investment and the adoption of commercial services are important, AI readiness in low and middle-income countries (LMICs) depends on coordinated market development that synchronizes supply (data centers, connectivity), demand (government cloud migration, enterprise uptake and disruptive business models), and rules (data protection, interoperability, cybersecurity). The World Bank Group is a force multiplier. Combining IBRD policy reforms capacity building and derisking, IFC financing and advisory, and MIGA risk guarantees mobilize private capital and de-risks entry, creating viable local and regional cloud markets. This integrated approach accelerates adoption, improves service reliability and security, and enables scalable AI use cases in the public and private sectors.

Next Steps

The World Bank Group will deepen coordination by building ecosystem-wide programs that combine IBRD lending and policy support, IFC financing and advice, and MIGA guarantees to attract private investment and reduce risk. It will strengthen competition through fair rules, common technical standards, strong data protection, and simpler permitting, while boosting demand by helping governments adopt cloud solutions, digital services, and public-private partnerships. Progress will be tracked by measuring jobs created, private investment mobilized, digital uptake to adjust course and scale what works.