AI's Revolution: From Infrastructure Gaps to Opportunity Acceleration
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Lessons for Bridging Digital Divides in the Machine Learning Era
What This Covers:
How AI is changing the landscape of the digital divide
Critical lessons from 25+ years of digital infrastructure investment
The role of public-private partnerships in technology adoption
How regulation and policy can empower developing economies
The emerging challenges of data governance and sovereignty
Episode Overview
This panel discussion from PTC'DC (April 22, 2025) brought together leaders from across public, private, and carrier sectors to address the challenge of national competitiveness in the AI era and strategies to avoid a new digital divide. The discussion explored how the massive infrastructure demands of AI could either worsen existing digital inequalities or present unique opportunities for developing nations.
Central Insight: The true challenge in bridging the AI divide isn't just infrastructure access but compressing the adoption timeline from the 25 years it took with internet connectivity to just 5-10 years for AI capabilities.
Featured Experts
Robert "Pepper" Pepper, Senior Fellow, Global Digital Inclusion Partnership
Nebucha, Fiji National Provident Fund (US$5 billion pension fund)
Obinna Isiadinso, Senior Investment Officer with IFC, Global Sector Lead for Data Centers & Cloud Services
Dave Schaefer, CEO, Cogent Communications (carrier of ~25% of global internet traffic)
Lynn Smullen, Moderator, Oracle (North America Data Platform Business)
Key Questions
How can we apply lessons from bridging internet divides to prevent an AI divide?
What roles do private capital, government policy, and international institutions play?
How do we balance data sovereignty with the need for open data flows?
What models of partnership can accelerate digital transformation globally?
Key Topics Explored
Evolving Beyond Infrastructure Access
Robert Pepper highlighted that the current digital divide is no longer primarily about network infrastructure. About 95% of the world's population has network coverage, but 2 billion people who could connect aren't connecting. Key barriers include affordability (especially of devices), digital readiness/skills, and relevance. For AI, the goal must be to compress the 25-year adoption curve we saw with internet to 5-10 years, focusing on democratizing access to AI capabilities through open models and edge computing.
The Economics of Digital Infrastructure
Dave Schaefer provided historical context on how the internet disrupted telecommunications, noting the industry lost $2 trillion in value while creating $20 trillion in broader economic value. He cautioned that AI faces similar challenges with sustainable business models, highlighting that while over 1,600 funded telecom companies existed when Cogent launched, fewer than a dozen survived. The panelists agreed that investment frameworks must be redesigned for the AI era to ensure the capital-intensive infrastructure delivers returns while supporting global access.
Regional Success Stories and Cautionary Tales
Obi Nau shared IFC's experiences investing in emerging markets, contrasting success stories like Nigeria (where mobile adoption far exceeded projections) and South Africa (now hosting 50% of Africa's data center capacity) with disappointments like Turkey, where IT outsourcing didn't develop as expected. The unpredictable nature of market development underscores the need for flexibility in investment approaches, with a focus on countries showing policy innovation regardless of current income levels.
Session Highlights
(00:49) Opening Context: The Infrastructure Challenge
Lynn Smullen framed the discussion around the estimated $220-250 billion in global investment needed for AI infrastructure, highlighting the unprecedented partnership models emerging between public, private and carrier sectors to address this generational build.
(06:56) Historical Context of Digital Divides
Robert Pepper traced the evolution of digital inclusion efforts from the early 1990s when the Clinton administration first recognized internet connectivity as a national competitiveness issue, through the UN Broadband Commission's work driving national broadband plans globally.
(10:17) From Access Gap to Usage Gap
A critical insight from Pepper: The primary digital divide has evolved from network access to usage barriers. While only 4-5% of people lack network coverage, affordability, device costs, digital readiness, and relevance prevent 2 billion from connecting despite available infrastructure.
(16:03) Internet's Unique Characteristics and Economic Impact
Dave Schaefer explained how the internet created the first truly global addressable market for entrepreneurs while simultaneously disrupting the telecom industry, dropping telecom's share of GDP in OECD countries from 4.5% to 1.1% as value shifted to applications and services.
(31:26) IFC's Investment Lessons from Emerging Markets
Obinna Isiadinso shared key insights from IFC's 25 years investing in digital infrastructure across developing regions, emphasizing that markets grow at different and often unpredictable rates, making flexibility and continuous monitoring essential.
(35:40) Regulatory Balance: Protection vs. Innovation
The panel highlighted Kenya as an exemplary case where balanced regulation protected consumers while enabling innovation, particularly in mobile payments systems, demonstrating how appropriate governance can accelerate rather than hinder development.
(47:00) PPP Evolution: What's Working Now
The discussion highlighted the changing nature of public-private partnerships, with increased government commitment, multi-sourced financing including concessional facilities, and strategic use of de-risking instruments from institutions like IFC proving effective in recent projects.
(1:02:03) Closing Thoughts: AI's Resource Demands
Dave Schaefer raised a critical concern about AI's power consumption, noting it's already consuming 2% of global electricity, using up excess capacity built over 70 years, creating unprecedented infrastructure demands that may further concentrate development.
Key Takeaways
Usage Gap Over Access Gap: The current digital divide is primarily about affordability, skills, and relevance, not infrastructure availability—AI strategies must address these human factors.
De-risking Is Essential: Institutions like IFC play a crucial role in reducing investment risk in emerging markets, enabling earlier adoption of technologies that would otherwise arrive much later.
Policy Trumps Income Level: Countries with innovation-friendly policies can leapfrog wealthier nations with protectionist approaches, creating a new divide based on regulatory stance rather than economic status.
Democratized AI Requires Open Models: Open-source large language models may be crucial to preventing AI capabilities from concentrating only in wealthy nations and large corporations.
From Broadband to Cloud Divide: Future digital inclusion efforts must expand beyond connectivity to ensure equitable access to cloud services and AI tools needed for productivity and economic participation.
What's Next
The panel suggests we're witnessing a fundamental shift in how digital divides operate. Countries that embrace innovation-friendly policies, leverage international partnerships for de-risking investments, and focus on building human capability alongside infrastructure will have opportunities to leapfrog regardless of current economic status. However, resource constraints—particularly power generation for data centers—may create new bottlenecks that require novel solutions. The challenge for policymakers, investors and technology companies is to recognize that bridging the AI divide requires addressing the full stack from hard infrastructure through regulatory frameworks to human skills, with international collaboration playing a crucial role in harmonizing approaches across regions.
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