China narrows AI gap with US to near zero, Stanford report shows

A significant shift in the artificial intelligence landscape has emerged, as the gap between the capabilities of American and Chinese AI systems has nearly vanished, according to Stanford University's latest AI Index report for 2026. This report emphasizes that the competition in AI has heated up, with both nations exchanging the lead in model performance multiple times since early 2025. Once a comfortable lead for the United States, the landscape of AI development is now much more competitive. In February 2025, China's DeepSeek-R1 reached parity with the leading US AI system, and by March 2026, Anthropic's top model only outperformed its Chinese counterpart by a slim margin of 2.7%. Despite the narrowing gap, the race remains uneven. The United States excels in developing top-tier models and securing impactful patents, while China takes the lead in research output overall. The report highlights China's dominance in publication volume, citation counts, and patent generation, noting that it also leads in the installation of industrial robots. In 2025, the US produced 50 significant AI models, compared to China’s 30, thereby retaining an edge in cutting-edge technology. However, China's research output is rapidly evolving, capturing a larger portion of highly cited academic papers and patents. In 2024, China was responsible for 74.2% of all AI patents granted worldwide, amounting to 97,206 out of a total of 131,121. This marks a stark decline for the US, which saw its share drop from 42.8% in 2015 to just 12.1% today. When it comes to research publications, China accounted for 17.8% of all AI research papers in 2024, while the US lagged behind at 7.6%. Additionally, China's citation share reached 20.6%, compared to the US's 12.6%. Among the most-cited AI papers globally, China's representation increased from 33 in 2021 to 41 in 2024, while the US's share decreased from 64 to 46 during the same period. In terms of financial backing, the United States still leads with private AI investment soaring to $285.9 billion in 2025, more than 20 times the amount disclosed by China. However, the report points out that China's total spending is likely underestimated due to the significant involvement of state-backed funding. Furthermore, in 2025, the US saw the emergence of 1,953 newly funded AI companies, which is more than ten times the number in the next closest country.