Moderate to High AI Adoption in the Baltics: Lithuania (21.0%) leads the region, while Estonia and Latvia, though not explicitly listed, are widely recognized for their advanced digital infrastructure and tech-savvy populations, suggesting similarly high levels of AI engagement and placing the Baltic states among Europe’s digital frontrunners.
The AI Economy Institute, Microsoft’s flagship think tank released its AI Diffusion Report, offering comprehensive view of where artificial intelligence is being used, developed, and built globally. The report provides country-level estimates of AI adoption, insights into innovation hubs, AI skills trends, and the critical role of digital infrastructure in enabling equitable access to AI.
Artificial intelligence is the next great general-purpose technology—and the fastest-spreading technology in human history. In less than three years, more than 1.2 billion people have used AI tools, a rate of adoption faster than the internet, the personal computer, or even the smartphone. Yet, similar to other general-purpose technologies before, its benefits are not spreading evenly. AI use in the Global North is roughly double that in the Global South. Without focused effort, this gap will define who benefits from AI for decades to come.
Three Forces Driving AI Transformation
AI’s rapid diffusion is powered by three interconnected forces: frontier builders—researchers and model creators pushing the limits of intelligence; infrastructure builders—engineers and institutions scaling breakthroughs through compute, connectivity, and skills; and users—individuals and organizations applying AI to learn, create, and solve real-world problem.
The Building Blocks of AI
AI adoption rises where strong economic foundations exist and lags where they do not. At the heart of this divide are the essential building blocks: electricity powering devices and data centers; data center forming the backbone of global networks; the internet connecting users and enabling data flow; digital and AI skills unlocking the ability to use and innovate; and language, which determines who can access AI and how it evolves.
“The Baltic region stands out as a digital leader in Europe, with Lithuania’s 21% AI adoption rate and Estonia and Latvia’s advanced digital infrastructure setting the pace for responsible and inclusive AI growth. Our commitment to digital skills, innovation, and public-private collaboration is turning potential into progress. The future of AI in the Baltics is bright, provided we continue to invest in people, infrastructure, and policies that ensure everyone can benefit from this transformative technology.” Leonid Polupan, Country Manager, Microsoft Ukraine and Baltics.
Key Findings
- Fastest Adoption in History: As a general-purpose technology, AI stands on the shoulders of three others—electricity, connectivity, and computing. Its adoption is fastest where these foundations exist, and slowest where they do not. Nearly four billion people—half the world—still lack the basics needed to use AI.
- Uneven Benefits: AI adoption in the Global North is roughly twice that of the Global South, with the gap widening sharply in countries where GDP per capita falls below $20,000. In some Global North countries, more than half of the working-age population uses AI, while in parts of Sub-Saharan Africa and Asia, some of the least developed nations have adoption rates below 10%.
- Language Matters: Nations where low-resource languages dominate—like Malawi or Laos—show lower adoption even after adjusting for GDP and internet access.
- AI Diffusion Leaders: the UAE (59,4%), Singapore (58,6%), Norway (45,3%) and Ireland (41,7%) —stand out as leaders in AI Adoption, proving that strong access to technology, education, and policy coordination can drive rapid adoption even without frontier-level model development or data centers.
- Moderate to High AI Adoption in the Baltics: Lithuania (21.0%) leads the region, while Estonia and Latvia, though not explicitly listed, are widely recognized for their advanced digital infrastructure and tech-savvy populations, suggesting similarly high levels of AI engagement and placing the Baltic states among Europe’s digital frontrunners.
- Frontier Narrowing: From a frontier builder perspective, the number of AI models continues to rise, while the performance gap between them keeps narrowing. The U.S., led by OpenAI’s GPT-5, remains at the frontier, with China trailing by less than six months. Only seven countries—the U.S., China, France, South Korea, the U.K., Canada, and Israel—rank among the top 200 models, and the distance between the frontier (U.S.) and the last of these (Israel) is now just 11 months.
- Infrastructure Concentration: From an infrastructure builder perspective, the U.S. and China together host 86% of global data center capacity, underscoring how concentrated the foundation of AI remains.
Artificial intelligence is the next great general-purpose technology—and the fastest-spreading in history. Yet, like electricity and connectivity before it, its benefits are not evenly distributed. Closing the adoption gap will require coordinated efforts across infrastructure, skills, and language accessibility.
About the AI Economy Institute
The AI Economy Institute is Microsoft’s think tank focused on advancing an inclusive, secure, and trustworthy AI economy through research, policy engagement, and global collaboration.
Top image: The Microsoft AI Diffusion Report 2025 highlights global AI adoption trends, regional gaps, key drivers, and calls for investment in infrastructure, skills, and secure, inclusive AI use. Image courtesy of Microsoft.