In October 2025, global policymakers, investors, and innovators gathered in Bali for the Sustainable AI for Our Common Future Dialogue, hosted by the Government of Indonesia and convened by the Tri Hita Karana G20 Global Blended Finance Alliance (GBFA). The dialogue centred on the intersection of two major transformations: the rapid rise of Artificial Intelligence (AI) and the just energy transition.

Powering AI demands vast amounts of energy and water. Electricity consumption from data centres could reach nearly one trillion kilowatt hours by 2030—roughly equivalent to Japan’s total use (IEA, 2025)—while water requirements for cooling rival those of major cities (UK Government, 2025). Even before the age of AI, global energy demand was expected to double by mid-century, driven largely by population growth in developing countries (IEA, 2025; UNFPA, 2024), where the cost of capital for a just transition is two to three times higher than in advanced economies (IEA, 2023).

Investments in AI infrastructure magnify the challenges developing countries face to keep pace with this new era. Private AI financing reached more than $250 billion last year, surpassing total annual climate finance flows to developing nations (Stanford University, 2025). By 2028, spending on data centres and cloud infrastructure could near $3 trillion (Morgan Stanley, 2025), rising to $7 trillion by 2030 (McKinsey, 2025) —roughly equivalent to the annual investment needed for the global clean energy transition (BloombergNEF, 2025).

Today, developing economies absorb just a fraction of AI infrastructure and venture capital investments (OECD, 2025), while only 32% of businesses in developing nations have adopted AI, compared with 85% in advanced economies (Mohieldin, 2025). This widening AI divide comes as human development progress has fallen to its lowest point in 35 years (UNDP HDI, 2025), and 1.2 billion young people prepare to enter a labour market that offers just 400 million jobs (World Bank, 2025).

The possibility that AI could further erode development is real, but so too are the opportunities to advance human-centred AI adoption. It is a matter of choices. Development depends less on what AI can do, and more on empowering people to make the most of technology (UNDP HDR, 2025). With targeted cooperation and public-private investments, the era of AI offers countries a chance to leapfrog traditional development stages by leveraging investments in compute to narrow the clean energy financing gap, boost skills, and build more resilient and equitable societies, positively influencing up to 79 percent of the SDGs (Mohieldin, 2025).

ASIGN: A Global Platform for Sustainable AI

A key outcome of the Bali Dialogue was the launch of the “Alliance for Sustainable Inclusive Intelligence (ASIGN) Global Blended Finance Roadmap”. The initiative aims to channel public, private, and philanthropic capital into infrastructure and human capabilities that will empower developing economies to thrive in the age of AI. 

AI is already helping countries tackle climate challenges. UNDP is at the forefront of that effort. The UNDP SDG AI Lab, for example, is developing a Digital Social Vulnerability Index, a machine-learning and GIS tool that maps community resilience and identifies populations most exposed to climate shocks (UNDP SDG AI Lab, 2024).UNDP also supports governments in deploying AI to improve efficiency, productivity, and tax collection, while mobilizing investment for essential infrastructure—such as battery energy storage systems and cooling and energy-efficiency technologies—currently underrepresented in blended finance portfolios (Convergence, 2025). These innovations are not only foundational to sustainable AI deployment but also to achieving low-carbon, resilient growth.

Indonesia’s Golden Vision 2045 illustrates how strategic AI investments can accelerate national sustainable development. Its emphasis on “sovereign AI”—ensuring technology serves ethical and sustainable outcomes—aims for a triple win: decarbonization, digital inclusion, and economic diversification. By 2030, this approach could add USD$366 billion to Indonesia’s GDP, scaffolding an innovation economy that will boost skills needed to utilize AI for human benefit and hasten a clean energy transition. 

AI is poised to disrupt every sector of the economy—agriculture, health, education, and finance—on a scale comparable to the Industrial Revolution (UNDP HDR, 2025). Its acceleration carries profound implications for human development, labour markets, and environmental sustainability. But as UNDP’s 2025 Human Development Report underscores, technology’s trajectory is not preordained. Whether AI deepens divides or drives shared prosperity depends on the choices we make today.

Unlocking AI’s development potential demands financial innovation that aligns profit with purpose. The ASIGN platform provides a unified mechanism for global leaders to steer this extraordinary wave of technological progress toward inclusive human development. As a founding ‘Knowledge Partner’ to the G20 Global Blended Finance Alliance (GBFA), UNDP is committed to advancing the ASIGN initiative, rooted in the Tri Hita Karana values of harmony between people, planet, and prosperity.

In the Maldives and Timor-Leste, UNDP has deployed AI-enabled early warning systems and drone-based shoreline mapping to anticipate flooding and coastal erosion, strengthening community adaptation. In Africa, UNDP’s Climate Information and Early Warning Systems Programme is integrating AI forecasting to extend life-saving alerts to millions in the Sahel and Horn of Africa. Meanwhile, the UNDP–OCHA “Data Futures Platform” uses predictive analytics to anticipate climate-related displacement and food insecurity, helping governments act before
crises escalate.

The UNDP SDG AI Lab is advancing this frontier even further. Based in Istanbul, the Lab has developed the Digital Social Vulnerability Index (DSVI) — a machine-learning and GIS tool that maps community resilience and identifies areas most exposed to climate shocks. It is now being applied in the Horn of Africa and other regions to inform targeted adaptation investments and strengthen local decision-making.

These efforts complement broader UN system initiatives such as Google’s Flood Hub, which provides early warnings across 80 countries, and Climate TRACE, which uses AI and satellite data to monitor emissions from 70,000 industrial sources worldwide. Together, they demonstrate how responsible AI can serve as a positive tipping point for climate action — mobilizing private capital, strengthening local innovation ecosystems, and improving resilience where it is most needed.

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The article was written by Sara Ferrer Olivella, UNDP Indonesia Resident Representative. It has been originally published on Group of Nation's Magazine, Volume 30 on G7 Review Canada Edition (2025).