Next wave of global AI innovation to shift investments toward the Global South

The next wave of AI investment will see an increased focus on the Global South, according to a study by the Future Investment Initiative Institute in collaboration with Accenture. The research found that 9 in 10 investors plan to invest in AI across India, Southeast Asia, and the Middle East.

Since AI technologies really began picking up steam several years ago, most investment has been concentrated in North America and Europe, with companies like OpenAI, Google, and other mostly US-based big tech companies dominating the space.

But in the years ahead, the focus of investments may be tilting. The report, which launched at FII9 (a global investment conference in Riyadh), shows that 87% of global investors intend to increase their AI-related investments in the Global South within the next 12-24 months.

That pivot could begin to rebalance global technology development while supporting the next era of AI innovation outside of traditional hubs.

So why are global investors excited about the Global South? The most frequently cited advantages include a competitive talent base (75%), affordable energy for compute (70%), digital and physical infrastructure readiness (69%), and strong domestic demand (67%).

The report surveyed 250 C-suite leaders from around the world in private equity firms, venture capital firms, and corporate venture capital units of large enterprises. A total of 70% of respondents said they have a dedicated team or desk for the Global South, with another 26% planning to establish one.

"We are excited to join FII in launching this insightful report, which provides a unique and timely opportunity for global business leaders to learn about the untapped potential of AI to unlock growth in the Global South,” said Julie Sweet, chair and CEO of Accenture.

Imbalance in AI funding

Despite the Global South being home to more than 23,000 AI startups since 2010, investment flows remain heavily concentrated in the Global North, creating a significant disparity. One of the main challenges to making southward investments, according to respondents, is a lack of proven business models among companies operating there, and a significant talent gap.

There has been a significant funding disparity over the last three years. AI startups in the Global North received a staggering $108.3 billion in deal value, while those in the Global South received only around $12 billion.

There are also far fewer unicorns in the developing world: Out of these thousands of Global South startups, only eight have achieved ‘unicorn status’ (being valued over $1 billion), compared to the 305 in the Global North.

This imbalance suggests that while the Global South is a major engine for global economic growth, projected to contribute one-quarter of global growth by 2030, its AI ecosystems remain underfunded and their potential largely untapped.

Regional AI hotspots and opportunities

Investor interest is highest in India (90%) and Southeast Asia (44%), followed by the Middle East (29%), Africa (21%), and Latin America (17%).

The report notes that Asia-Pacific is leading the Global South’s AI economy, with over 13,500 startups with $16 billion in valuations and $136 billion in FDI inflows. Latin American AI companies are valued at a total of around $5.3 billion and the Middle East’s over 2,200 AI startups are worth $5.6 billion.

APAC’s AI economy is largely led by India, which is bolstering its leadership with the $1.2 billion IndiaAI Mission and secured $2.4 billion in venture funding in the first quarter of this year alone.

In the Middle East, countries like Saudi Arabia and the UAE are fueling innovation by making AI development a core economic and geopolitical priority. GCC countries have seen strategic government initiatives, include landmark investments, as well as the development of culturally attuned, language-specific AI solutions.

When it comes to Latin America, the region is quickly becoming a AI hub. Local governments there are using AI to tackle regional challenges such as the need for clean energy and financial technology innovation.

Africa’s AI profile is also on the rise: With over 1,950 AI startups, Africa is seeing breakthroughs in financial and agricultural technology, leveraging high mobile penetration to leapfrog traditional systems.

A key investment opportunity lies in bridging the infrastructure gap: More than 95% of AI startups in the Global South are focused on the application layer, creating a massive need for investment in foundational technologies, such as data centers, cloud services, and compute infrastructure.

One main takeaway from the report is that in order to realize AI’s full potential in the Global South, investors need to target region-specific opportunities, align with strategic government initiatives, and build trusted local ecosystems.

“We stand at an inflection point. AI is not merely a technological shift; it is the key to reinvention,” said Ramez Shehadi, managing director at Accenture.

“But as our latest research reveals, a profound oversight threatens to leave many behind: the disproportionate focus on AI innovation in and for the Global North. Investing in the Global South is not only a strategic economic imperative but a chance to champion responsible AI from the ground up, ensuring inclusion, equity and sustainable growth are baked into the foundation of the next generation of industry leaders.”