Bank of America Identifies South Korea, UAE as Top AI Contenders Beyond US and China

While the United States and China maintain a commanding lead in the global artificial intelligence race, a handful of other nations are emerging as strong contenders to capitalize on the next wave of AI development, according to a new report from Bank of America.

The brokerage notes that other economies are not trying to challenge the two leaders directly but are instead positioning themselves to capture AI-driven growth through strategic advantages in semiconductor supply chains, data-center investment, and broad economic adoption.

U.S. and China Maintain Dominance

The report reiterates that the AI landscape is highly concentrated around the U.S. and China. Bank of America attributes Washington's lead to its strength in private investment, advanced chips, and computing infrastructure.

Beijing, meanwhile, leverages its significant manufacturing scale, lower energy costs, and dominance in processed critical minerals to secure its position. These fundamental advantages create a high barrier to entry for other nations.

The Strongest Challengers

Bank of America identified South Korea as the strongest overall AI contender for both the short and long term. The country's strengths include:

Ad

• Deep exposure to semiconductor manufacturing.
• Rapidly expanding AI adoption rates.
• Supportive government policies.
• A strong ability to translate AI deployment into long-term productivity gains.

The United Arab Emirates was ranked as another leading contender, backed by heavy government investment, abundant energy resources, and one of the world's highest AI adoption rates. However, the report noted that geopolitical risks remain a key uncertainty for the nation.

Other countries forming a strong second tier of AI leaders include Canada, Germany, Israel, the Netherlands, Singapore, Switzerland, and the United Kingdom. Taiwan, Australia, and Japan were cited as near-term beneficiaries due to their roles in semiconductor manufacturing, critical minerals, and data-center supply chains.

Long-Term Outlook and Key Differentiators

Among emerging markets, Bank of America highlighted India as the clearest long-term challenger. While it currently lacks a major semiconductor manufacturing base, the report states India is already one of the largest AI adoption markets with diffusion levels comparable to several advanced economies.

The report also emphasized that abundant and reliable energy is becoming an increasingly critical competitive advantage in the AI sector. This gives an edge to countries like Canada, France, and the UAE as demand from data centers and high-intensity computing continues to expand.