Bank of America’s recent report underscores that the global AI race remains heavily skewed toward two principal players - the United States and China. According to the bank, Washington preserves a lead in private investment, advanced chip technology and computing infrastructure, while Beijing’s advantages include manufacturing scale, lower energy costs and a dominant position in processed critical minerals.
Rather than mounting a direct challenge to those two leaders, several other economies are positioning themselves to reap the benefits of AI growth by leveraging supply-chain roles in semiconductors, investment in data-center capacity and broader adoption of AI across industries. The bank frames this as a strategy of specialization and capture of complementary parts of the AI value chain.
South Korea emerges as the most complete contender outside the U.S. and China. Bank of America ranks Korea as the strongest overall AI candidate in both the short and long term. The report emphasizes Korea’s combination of exposure to semiconductor manufacturing, rapid expansion of AI adoption, government policies that support AI deployment and the capacity to convert that deployment into sustained productivity gains.
The United Arab Emirates also ranks highly. The UAE’s standing is tied to significant government investment, plentiful energy resources and one of the world’s highest AI adoption rates. The bank notes, however, that geopolitical risk remains an important uncertainty for the UAE’s outlook.
Beyond those two, the bank places Canada, Germany, Israel, the Netherlands, Singapore, Switzerland and the United Kingdom in a strong second tier of AI leaders. These economies are cited as having important roles to play through either investment, adoption or elements of the underlying technology and infrastructure supporting AI.
India is identified as the clearest long-term challenger among emerging markets. While the report observes that India currently lacks the semiconductor manufacturing base found in some Asian peers, it also states India is already among the largest AI adoption markets globally and shows diffusion levels comparable with several advanced economies. Bank of America says that stronger policy support and job creation could materially improve India’s long-term AI outlook, while noting that labour-market disruption will be a key challenge.
In the near term, the bank highlights Taiwan, Australia and Japan as beneficiaries of the global AI infrastructure build-out because of their importance to semiconductor manufacturing, critical minerals and data-center supply chains. The report cautions that these nations still face hurdles in turning such advantages into wider productivity improvements.
Finally, Bank of America points to abundant and reliable energy as an increasingly important competitive edge as computing workloads and data-center capacity expand. The bank cites Canada, France and the UAE as examples of countries that gain an advantage from strong energy fundamentals in the context of rising AI compute demand.
Implications for markets and sectors
The report suggests that semiconductor manufacturing, data-center development, energy supply and broader technology adoption are the primary sectors likely to be affected as these countries position themselves within the AI ecosystem. Governments and private investors targeting those components of the AI value chain may find opportunities as countries pursue different pathways to capture AI-driven growth.