The recent rapid evolution of artificial intelligence (AI) has outpaced society's ability to fully grasp its implications. Unlike technological shifts that have unfolded over decades, Al's integration is accelerating at an unprecedented speed and scale. Along with Al's immense opportunities come new responsibilities--especially for ethical deployment, accountability, and alignment with human values--that have few precedents in previous technology revolutions. This 2025 edition of the Digital Progress and Trends Report (DPTR) explores how low- and middle-income countries can harness AI to drive inclusive and sustainable development--and avoid being left behind. The report explains what makes AI different from earlier general-purpose technologies and why it matters for development. It introduces the 4Cs, the foundations essential for AI adoption, adaptation, and innovation: connectivity (infrastructure), compute (processing power), context (training data, algorithms, and applications), and competency (digital skills). Drawing on rich, novel data sets, this DPTR benchmarks countries across the 4Cs, analyzes supply and demand dynamics, and identifies market failures and externalities where policy action is urgently needed. This report emphasizes the need for global coordination and targeted interventions to close the widening AI gaps, where resource constraints threaten to exacerbate inequality.

Policy insights will help governments unlock AI's potential while navigating its risks.