Investing.com — While the United States and China remain far ahead in the global artificial intelligence race, a report from Bank of America says a handful of countries are emerging as the strongest contenders to benefit from the next phase of AI development.
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The brokerage said the AI landscape is becoming increasingly concentrated around the U.S. and China, with Washington retaining its lead in private investment, advanced chips and computing infrastructure, while Beijing benefits from manufacturing scale, lower energy costs and dominance in processed critical minerals.
Rather than attempting to challenge those two leaders directly, other economies are positioning themselves to capture AI-driven growth through semiconductor supply chains, data-center investment and broader adoption of AI across their economies.
South Korea stands out
Among the countries outside the U.S. and China, Bank of America identified South Korea as the strongest overall AI contender over both the short and long term.
The brokerage said Korea combines exposure to semiconductor manufacturing with rapidly expanding AI adoption, supportive government policies and the ability to translate AI deployment into long-term productivity gains.
The United Arab Emirates ranked as another leading contender, supported by heavy government investment, abundant energy resources and one of the world’s highest AI adoption rates, although geopolitical risks remain a key uncertainty. Canada, Germany, Israel, the Netherlands, Singapore, Switzerland and the United Kingdom also formed a strong second tier of AI leaders.
India seen as long-term AI challenger
Among emerging markets, BofA highlighted India as the clearest long-term AI challenger.
While India currently lacks the semiconductor manufacturing base enjoyed by some Asian peers, the brokerage said it already ranks among the world’s largest AI adoption markets and has diffusion levels comparable with several advanced economies. Stronger policy support and job creation could significantly improve its long-term AI outlook, although labour-market disruption remains a key challenge.
The report also identified Taiwan, Australia and Japan as near-term beneficiaries of the global AI infrastructure build-out because of their importance to semiconductor manufacturing, critical minerals and data-center supply chains. However, it said these countries still face challenges in converting those advantages into broader productivity gains.
According to BofA, abundant and reliable energy is becoming an increasingly important competitive advantage in AI, giving countries such as Canada, France and the UAE an edge as computing workloads and data-center capacity continue to expand.
