BofA Identifies South Korea and UAE as Top AI Contenders Beyond US and China

South Korea and the United Arab Emirates are the strongest contenders in the global artificial intelligence race outside of the established leaders, the United States and China, according to a new report from Bank of America.

While the U.S. and China are solidifying their lead, the brokerage notes that other economies are strategically positioning themselves to capture growth by focusing on specific niches rather than competing directly.

The Evolving AI Landscape

The Bank of America report outlines a global AI landscape increasingly concentrated around two superpowers. The U.S. maintains its lead through private investment, advanced chips, and computing infrastructure. In contrast, China leverages its manufacturing scale, lower energy costs, and dominance in processed critical minerals.

Other nations are adapting by targeting areas like semiconductor supply chains, data-center investment, and driving broad adoption of AI technologies across their economies, the report states.

Top Contenders and Challengers

Bank of America identified a handful of countries best positioned to benefit from the next phase of AI development.

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• South Korea: Named the strongest overall AI contender for both the short and long term. The country's strengths include its deep exposure to semiconductor manufacturing, rapidly growing AI adoption, supportive government policies, and the potential to translate AI into significant productivity gains.
• United Arab Emirates: 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 brokerage noted that geopolitical risks remain a key uncertainty.

A strong second tier of AI leaders includes Canada, Germany, Israel, the Netherlands, Singapore, Switzerland, and the United Kingdom.

Regional and Long-Term Outlook

The report also highlighted India as the clearest long-term AI challenger among emerging markets. Despite lacking a large semiconductor manufacturing base, India is already one of the world's largest AI adoption markets with diffusion levels comparable to some advanced economies.

Taiwan, Australia, and Japan were identified as near-term beneficiaries of the global AI infrastructure build-out due to their roles in semiconductor manufacturing, critical minerals, and data-center supply chains. According to BofA, abundant and reliable energy is also becoming a key competitive advantage, giving an edge to countries like Canada, France, and the UAE as demand from data centers continues to grow.