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Or sign-in if you have an account.The AI boom is so powerful in nature that it is overwhelming all other drivers of returns and shaping a new AI-based world order. Photo by KIRILL KUDRYAVTSEV/AFP via Getty ImagesIt’s hard to recall a time when global markets were so obsessed with a single storyline. The AI boom is now so powerful and widespread in nature that it is overwhelming all other drivers of returns and shaping a new AI-based world order.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe relative performance of the world’s major stock markets over the past year can be explained by how much exposure they have to AI. Nations with a large foothold in the “stack” of industries developing AI infrastructure and services are massively outperforming, while those without are lagging by record margins. The winners include the U.S. and China, thanks above all to their foundational AI models; Taiwan and South Korea on the strength of chip manufacturers; Japan and Israel on a broad array of AI skills.The partial winners are secondary suppliers. They include nations that are exporters of circuits, servers and other AI-related electronic hardware — such as Mexico, Thailand and Vietnam — or that play a role in the AI stack as both exporters and sizeable bases for data centres, such as Malaysia and Singapore.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe losers include much of Europe, with the odd exception (the Netherlands is a major supplier of advanced chips from one big company). Worst off are those countries that lack “AI plays” and rely heavily on the industries most exposed to disruption, including IT services.In the U.S., AI plays constitute more than 40 per cent of the market cap and have accounted for more than 80 per cent of the returns this year. The return and concentration profile is similar in Japan and even more extreme in South Korea and Taiwan. In China, all the action is taking place in newer growth-oriented segments of the market, while the old-economy sectors struggle. Meanwhile, the likes of India and the Philippines, which are perceived to be at the wrong end of the AI-wrecking ball, are well in the red this year.While the internet frenzy of the late 1990s was also an overpowering global phenomenon, it was not so narrowly focused. The leading tech subsectors back then were communications equipment, semiconductors and wireless telecom services, which accounted for 60 per cent of global market gains at the dotcom peak in early 2000. So far this year, the three leading tech subsectors (semiconductors, hardware and electronic equipment) have contributed a significantly larger share of global market gains, over 70 per cent.Also, unlike the dotcom peak, when tech-fuelled returns were spilling across industries and markets, today they are sucking money away from non-AI industries and nations. Even in the U.S., investment outside of the tech sector is declining in real terms. Meanwhile, foreigners keep pulling money out of countries seen as peripheral to the AI boom, from the U.K. to Indonesia.Global investors may be focused almost exclusively on AI, but they are not choosing winners at random. The leading AI nations are long-established tech powers with a deep commitment to R&D, spending more than three per cent of GDP on average — over three times the level of lagging countries. They also invest heavily in technology, with tech spending averaging 3.7 per cent of GDP among AI winners, compared with 2.7 per cent for partial winners and 1.6 per cent for losers.To be sure, no leader’s position is secure. In the U.S., the performance of the dominant Magnificent Seven tech stocks is increasingly diverging, with three up, three down and one flat for the year, while all face some form of foreign competition, often from China.In China, giants such as Alibaba and Tencent are still trying to determine how to profit from AI and are down around 30 per cent this year. The real AI momentum in China is with newer tech companies, often listed on secondary boards that are much better known to local than to foreign investors, such as ChiNext; it is up 35 per cent for the year.In Japan, market leadership has shifted sharply towards tech over the past year, with semiconductors up 200 per cent and computer memory pioneer Kioxia rising by 3,500 per cent to become the nation’s single largest stock.The AI booster effect continues to help power many economies through one crisis after another, from the tariff war to the Iran oil shock. Expectations for GDP growth have risen by nearly a full percentage point for the AI winners since the start of the year, while falling significantly for the losers. In countries like the U.S., Taiwan and Korea, the large gains in advanced manufacturing, the associated surge in profits and the wealth effect from the AI-led stock market gains keep lifting economic growth. In countries like China, Thailand and Mexico, tech exports are rising rapidly enough to offset weakness in other parts of their economies, including domestic demand.In short, it’s an AI-driven world. Of course, this monomania will not last for ever. The speculative enthusiasm will fade even as the technological revolution endures and expands in scope. As was the case following the railroad boom of the 19th century and the internet craze at the turn of this century, a more balanced global market will eventually re-emerge. But so long as investors continue to see AI as the sole foundation of the next world order, they will keep ranking nations based on their tech prowess.The writer is chair of Rockefeller International. His latest book is ‘What Went Wrong With Capitalism’© 2026 The Financial Times Ltd Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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