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

While the United States and China continue to dominate the global artificial intelligence landscape, a new report from Bank of America identifies a select group of countries emerging as the strongest contenders to capitalize on the next wave of AI development. These nations are carving out strategic niches rather than attempting to challenge the two leaders directly.

The AI Leaders and Their Niches

According to the brokerage, the U.S. maintains its lead through superior private investment, advanced semiconductors, and computing infrastructure. China, meanwhile, leverages its manufacturing scale, lower energy costs, and a commanding position in processed critical minerals.

Other economies are positioning themselves to capture AI-driven growth by focusing on specific areas. These include roles in the semiconductor supply chain, significant investments in data centers, and fostering the broad adoption of AI technologies throughout their domestic economies, the report notes.

South Korea and UAE Lead the Pack

Bank of America singled out South Korea as the strongest overall AI contender beyond the U.S. and China for both the short and long term. The country's strengths, according to the report, include:

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• Exposure to the semiconductor manufacturing ecosystem.
• 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 also highlighted as a leading contender. The UAE's position is supported by heavy government investment, abundant energy resources for power-intensive data centers, and one of the world's highest AI adoption rates. However, BofA noted that geopolitical risks remain a key uncertainty for the nation.

Other Noteworthy Players

The report identified a strong second tier of AI leaders that includes Canada, Germany, Israel, the Netherlands, Singapore, Switzerland, and the United Kingdom. Among emerging markets, BofA views India as the clearest long-term challenger, citing its massive AI adoption market, though it currently lacks a domestic semiconductor manufacturing base.

Bank of America also named Taiwan, Australia, and Japan as near-term beneficiaries of the global AI infrastructure build-out due to their critical roles in semiconductors, minerals, and data-center supply chains. The report emphasized that abundant and reliable energy is becoming an increasingly vital competitive advantage, giving an edge to countries like Canada, France, and the UAE as computing demands escalate.