Decentralizing AI Economics for Poverty Alleviation: Web3 Social Innovation Systems in the Global South

Artificial Intelligence (AI) is increasingly framed as a driver of economic transformation, yet its capacity to alleviate poverty in the Global South remains contested. This article introduces the notion of AI Economics—the political economy of value creation, extraction, and redistribution in AI systems—to interrogate h ow innovation agendas intersect with structural inequalities. This article examines how Social Innovation (SI) systems, when coupled with decentralized Web3 technologies such as blockchain, Decentralized Autonomous Organizations (DAOs), and data cooperatives, may challenge data monopolies, redistribute economic gains, and support inclusive development. Drawing on Action Research (AR) conducted during the AI4SI International Summer School in Donostia-San Sebastián, this article compares two contrasting ecosystems: (i) the Established AI4SI Ecosystem, marked by centralized governance and uneven benefits, and (ii) the Decentralized Web3 Emerging Ecosystem, which promotes community-driven innovation, data sovereignty, and alternative economic models. Findings underscore AI’s dual economic role: while it can expand digital justice, service provision, and empowerment, it also risks reinforcing dependency and inequality where infrastructures and governance remain weak. This article concludes that embedding AI Economics in context-sensitive, decentralized social innovation systems—aligned with ethical governance and the SDGs—is essential for realizing AI’s promise of poverty alleviation in the Global South.