The United States and China currently dominate the global artificial intelligence race, but which countries could emerge as contenders for third place and beyond? A special report by Bank of America, obtained by Calcalist, ranks the countries competing to become the next major AI powers.
None of these countries are close to the U.S. and China, which currently control the most advanced AI models and much of the infrastructure powering the industry. However, they represent the next tier of AI economies, countries that could experience accelerated growth over the next three to 10 years if they successfully address key challenges.
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Israel ranks highly across several important metrics, particularly entrepreneurship, private investment and human capital. However, it trails countries such as the United Arab Emirates and South Korea across many categories, while Canada, Switzerland, the Netherlands and Singapore outperform Israel in several areas. As has often been the case with Israel’s technology sector, the country’s strengths lie in innovation and talent, while its weaknesses include government investment, infrastructure costs and limited natural resources such as minerals and metals.
The Bank of America report evaluates countries based on both short-term and long-term AI readiness. The short-term ranking focuses mainly on the ability to build AI infrastructure, including computing capacity, energy availability and hardware supply chains. The long-term ranking examines whether countries can translate AI adoption into economic growth by improving productivity.
South Korea ranks first in both the short- and long-term assessments. The United Arab Emirates stands out in the long-term category, driven by the world's highest corporate adoption rate of AI, 70%, as well as aggressive government policies supported by abundant energy resources. The UAE has set a goal of becoming the world's leading AI country by 2031.
In the short-term ranking, which covers a period of up to three years and includes criteria ranging from investment and infrastructure to minerals availability and labor market stability, Israel ranks 12th out of 30 economies.
Israel scores particularly well in private investment in AI companies, the number of AI startups and its role in AI-related supply chains. However, it performs poorly in areas linked to energy availability, minerals and the physical infrastructure required for large-scale data centers. In these categories, Israel is surpassed by countries including Canada, Australia, Norway and France.
When it comes to private sector investment, Israel ranks fifth globally, with approximately $19 billion invested in AI-related companies between 2013 and 2025. It also ranks fifth in the number of AI companies, behind the U.S., China, Canada and the U.K.
Israel’s strongest advantage remains its concentration of AI talent. According to the report’s analysis, based largely on LinkedIn data, 2.1% of LinkedIn members registered in Israel in 2025 were classified as AI talent, the highest rate among the countries examined. Singapore ranked second with 1.8%, followed by Luxembourg with 1.6%. The report notes that smaller, highly developed countries tend to have an advantage in this measurement.
However, Israel falls behind in government investment in AI, where it does not rank among the top 10 countries. It also ranks poorly in energy readiness and data center costs, placing 19th in energy readiness and 22nd in the cost of building data centers among the 30 economies examined.
The low infrastructure ranking comes despite Israel’s natural gas reserves and the recent expansion of server farms. One factor that improves Israel’s position is its established semiconductor industry, which makes the country a significant player in the AI chip supply chain, particularly for the U.S. market.
The long-term ranking, which looks three to 10 years ahead, assesses countries’ ability to turn AI adoption into broad economic gains. Israel performs slightly better in this category, ranking 10th globally, ahead of countries including the Netherlands, Germany and Taiwan.
Israel scores strongly in workforce adaptability, business flexibility, research and development capabilities, and technology adoption. However, Bank of America warns that Israel may be particularly exposed to labor market disruption from AI because of its large concentration of highly educated, white-collar workers whose jobs involve cognitive tasks.
At the same time, the country’s relatively young population compared with aging European economies, combined with its ability to adapt quickly, could help Israel use AI as a growth engine rather than merely as a solution to labor shortages.
The report largely avoids geopolitical considerations, but notes that export restrictions and national security concerns could affect countries’ access to advanced AI models and computing infrastructure.