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

While the United States and China dominate the global artificial intelligence landscape, a new report from Bank of America identifies South Korea and the United Arab Emirates as the strongest contenders positioned to benefit from the next wave of AI development.

Other economies are not trying to challenge the two leaders directly but are instead carving out strategic niches in the AI ecosystem, from semiconductor supply chains to data-center investment and economy-wide adoption.

The AI Superpowers

According to the BofA analysis, the AI race is increasingly concentrated around the U.S. and China. The brokerage notes that Washington maintains its lead in private investment, advanced chips, and computing infrastructure, while Beijing benefits from its manufacturing scale, lower energy costs, and dominance in processed critical minerals.

Leading Contenders Emerge

Bank of America highlights South Korea as the strongest overall AI contender beyond the two superpowers for both the short and long term. The report cites the country's combination of semiconductor manufacturing exposure, rapidly expanding AI adoption, supportive government policies, and its ability to translate AI deployment into productivity gains.

The United Arab Emirates is also ranked as a leading challenger, supported by heavy government investment, abundant energy resources, and one of the world’s highest AI adoption rates. However, the report notes that geopolitical risks remain a key uncertainty for the nation.

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A strong second tier of AI leaders was also identified, comprising Canada, Germany, Israel, the Netherlands, Singapore, Switzerland, and the United Kingdom.

Long-Term Challengers and Niche Players

Among emerging markets, BofA points to India as the clearest long-term AI challenger. While currently lacking the semiconductor manufacturing base of some Asian peers, the report states India is already a massive AI adoption market with diffusion levels comparable to several advanced economies. Stronger policy support could improve its outlook, though labor-market disruption is a key challenge.

The analysis also identifies Taiwan, Australia, and Japan as near-term beneficiaries of the global AI infrastructure build-out due to their importance in:

• Semiconductor manufacturing
• Critical minerals
• Data-center supply chains

BofA cautions, however, that these countries still face challenges in converting these supply-chain advantages into broader productivity gains. The report also underscores that reliable energy is an increasingly important competitive advantage, giving an edge to countries like Canada, France, and the UAE as computing workloads expand.