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

South Korea and the United Arab Emirates are emerging as the strongest contenders in the global artificial intelligence race behind the United States and China, according to a new report from Bank of America. The analysis finds that while the U.S. and China have a commanding lead, a handful of other countries are strategically positioning themselves to benefit from the next wave of AI development.

The Global AI Landscape

Bank of America describes the AI landscape as increasingly concentrated around the United States and China. The report notes that Washington maintains its lead in private investment, advanced chips, and computing infrastructure. Beijing, meanwhile, benefits from its manufacturing scale, lower energy costs, and a dominant position in processed critical minerals.

Rather than competing directly, other economies are carving out niches to capture AI-driven growth. These strategies focus on critical areas such as semiconductor supply chains, data-center investment, and fostering widespread AI adoption across their economies, the report states.

Leading Challengers and Key Factors

Among the nations outside the top two, Bank of America identified South Korea as the strongest overall AI contender for both the short and long term. The brokerage cited the country's combination of:

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• Exposure to semiconductor manufacturing
• Rapidly expanding AI adoption
• Supportive government policies
• The ability to translate AI deployment into long-term productivity gains

The United Arab Emirates was ranked as another leading contender, propelled by heavy government investment, abundant energy resources, and one of the world's highest AI adoption rates. However, BofA noted that geopolitical risks remain a key uncertainty for the UAE. A strong second tier of AI leaders includes Canada, Germany, Israel, the Netherlands, Singapore, Switzerland, and the United Kingdom.

Long-Term Prospects and Emerging Markets

Looking at emerging markets, the report highlighted India as the clearest long-term AI challenger. While currently lacking a large semiconductor manufacturing base, India is already one of the world's largest AI adoption markets. BofA suggests that stronger policy support could significantly improve its outlook, though labor-market disruption is a key challenge.

The report also identified Taiwan, Australia, and Japan as near-term beneficiaries of the global AI infrastructure build-out due to their roles in semiconductors, critical minerals, and data-center supply chains. A critical competitive advantage is emerging in the form of abundant and reliable energy, giving an edge to countries like Canada, France, and the UAE as data-center power demands grow.