Artificial intelligence (AI) is a reality that is changing the world and reshaping the way humans live.

Systems and technologies designed to mimic or simulate human intelligence represent a technological breakthrough that is optimizing food production, improving health diagnostics, including more people in the financial system, revolutionizing the way we educate and accelerating infrastructure production, among other positive effects. Overall, AI is driving innovation across the board and making it possible to do more with fewer resources.

However, AI also poses risks, the severity of which will depend on how it is adopted, implemented and regulated, especially for developing countries, which include almost all of Latin America and the Caribbean (LAC).

The most relevant risk is the deepening of the gaps, to the extent that in LAC there is still 30% of the population without Internet access.
There are segments of society that are taking advantage, for example, of the use of AI for productive or everyday applications and there is another part of the population that cannot even access a web page, online information systems or educational content.

According to Mauricio Agudelo, director of Digital Transformation at CAF -development bank of Latin America and the Caribbean-, the increase in digital divides would have a significant impact, especially on labor markets. "To the extent that there is a greater demand for code development skills and, in general, for fourth industrial revolution skills, and many people are not acquiring those skills, there will be significant job losses."

Another risk in LAC is the digital development gap. There are countries like Brazil, Uruguay, Chile or Colombia that are designing modern artificial intelligence policies, especially in the field of generative AI (to create content), and others that still have huge challenges in infrastructure.

A third point is that of deep language models (LLMs), which enable artificial intelligence. Many of them are in English and are not incorporating content or algorithms with Spanish language and this reduces the possibilities of development of the Latin American digital industry.

In addition, AI requires high-performance computers that can process large volumes of data, and there is another infrastructure challenge for the region. This, in addition, has an environmental energy aspect. A figure from Boston Consulting Group indicates that the megawatt-hour consumption of the four large AI technology companies is similar to that of one hour in Colombia.
Therefore, there is the challenge of making this energy consumption for AI more efficient and reaching carbon neutrality.

As can be seen, AI can be a transformative tool for developing countries, but only if it is approached strategically. With proper preparation and an ethical vision, it could reduce inequalities and accelerate progress. However, if the risks are ignored, it could deepen social and economic gaps. "Success lies in balancing these factors," Agudelo explained.

CAF and Unesco issue

The challenging situation encouraged CAF to finalize an alliance with Unesco, the United Nations Educational, Scientific and Cultural Organization, in 2022 to drive the ethical and inclusive development of AI in the region. The joint work has made significant progress in seven countries, including technical assistance in AI policy development, implementation of normative experimentation models, and talent development in the field.

In the framework of the Second Ministerial and High Authorities Summit on the Ethics of Artificial Intelligence in Latin America and the Caribbean, held last year in Montevideo, Uruguay, Unesco and CAF renewed the commitment with a joint declaration that reaffirms the common goal of strengthening AI governance in the region.

This includes support for the development and deployment of Unesco's AI Readiness Assessment Methodology (RAM), the implementation of the roadmap approved at the same Montevideo summit, assistance in the design of leading AI institutions and government agencies, and the organization of the third regional summit on AI and Ethics this year.

Both organizations seek to position LAC as a global player in the field of ethical AI and to ensure that technological development in the region is inclusive and respectful of human rights.

The role of governments and private companies

Mauricio Agudelo, Director of Digital Transformation, CAF

What should LAC governments do to adopt AI and strengthen the digital economy?
First, define a governance structure and then have a public policy or a digital agenda around the issue. Additionally, we need to work on four major issues: computing infrastructure, but also broadband; innovation, research and development capacity, both at the level of universities and the associated digital industry; preparation of digital talent that will enter the entire AI ecosystem; and adoption of AI by companies in business models.

And what is the role of private enterprise in this digital development in the region?
There are two major fronts: one, the adoption of AI, no longer as a matter for chief technology officers, but for the boards of directors and senior management of companies. And, two, investing in developing AI-associated ecosystems or AI startups.