BofA Identifies South Korea, UAE as Top AI Contenders Outside U.S. and China

South Korea and the United Arab Emirates are emerging as the strongest contenders in the global artificial intelligence race outside of the dominant U.S. and China, according to a new report from Bank of America. The analysis suggests that while the two superpowers lead, other nations are carving out strategic niches to capitalize on AI-driven growth.

The Dominant Players

Bank of America notes that the global AI landscape is increasingly concentrated around the United States and China. The report attributes Washington's lead to its strength in private investment, advanced semiconductor chips, and computing infrastructure.

Meanwhile, Beijing leverages its vast manufacturing scale, lower energy costs, and a commanding position in processed critical minerals. Rather than challenging these leaders head-on, other economies are focusing on specific areas like semiconductor supply chains, data center investment, and broad AI adoption.

Leading Contenders Emerge

The BofA report identifies South Korea as the most formidable overall AI contender for both the short and long term. Its strengths include:

Ad

• Deep exposure to the semiconductor manufacturing industry.
• Rapidly expanding AI adoption across its economy.
• Supportive government policies fostering innovation.
• A strong capacity to translate AI deployment into long-term productivity gains.

The United Arab Emirates is also highlighted as a leading contender, propelled by heavy government investment, abundant energy resources, and one of the world's highest AI adoption rates. However, the report cautions that geopolitical risks remain a key uncertainty for the nation.

Long-Term Outlook and Other Key Nations

Bank of America identifies a strong second tier of AI leaders that includes Canada, Germany, Israel, the Netherlands, Singapore, Switzerland, and the United Kingdom. Among emerging markets, India is singled out as the clearest long-term challenger due to its large AI adoption market, with diffusion levels comparable to some advanced economies.

The report also names Taiwan, Australia, and Japan as near-term beneficiaries of the global AI infrastructure build-out, citing their roles in semiconductor manufacturing, critical minerals, and data-center supply chains. A key theme in the analysis is the growing importance of abundant and reliable energy, which BofA says gives an edge to countries like Canada, France, and the UAE as data-center power demands escalate.