South Korea, UAE Named Top AI Contenders Outside US and China: BofA

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 highlights how various economies are strategically positioning themselves to capture growth from AI through specialized advantages rather than direct competition.

U.S. and China Dominate, Others Specialize

The global AI landscape remains highly concentrated, with the United States leading in private investment and advanced computing infrastructure, while China leverages its manufacturing scale and dominance in processed critical minerals, BofA noted. Rather than challenging these two giants head-on, other countries are focusing on key segments of the AI value chain, from semiconductor supply to data-center investment.

Top Contenders Emerge

Bank of America identified South Korea as the strongest overall AI contender beyond the two superpowers, citing its combination of semiconductor manufacturing exposure, rapidly growing AI adoption, and supportive government policies. The report noted Korea's ability to translate AI deployment into long-term productivity gains is a key advantage.

The United Arab Emirates also ranks as a leading contender, propelled by significant government investment, abundant energy resources, and one of the world's highest AI adoption rates. However, BofA flagged geopolitical risks as a key uncertainty for the nation.

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

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Emerging Challengers and Infrastructure Plays

Among emerging markets, the report points to India as the clearest long-term challenger. While it currently lacks a major semiconductor manufacturing base, BofA said India is already one of the largest AI adoption markets and could significantly improve its outlook with stronger policy support, though labor-market disruption remains a challenge.

The report also identified near-term beneficiaries of the global AI infrastructure build-out:

• Taiwan, Australia, and Japan are positioned to benefit from their roles in semiconductor manufacturing, critical minerals, and data-center supply chains.
• However, these countries still face hurdles in converting these advantages into broader economic productivity gains, according to the analysis.

BofA concluded that abundant and reliable energy is an increasingly critical competitive advantage, giving an edge to countries like Canada, France, and the UAE as data-center power demands expand.