In the race to develop and implement generative artificial intelligence (AI), it has long been assumed that the U.S. enjoys a sizable lead over other nations. However, a new UN report reveals that China is far ahead of the rest of the world, including the U.S., in the sheer number of AI patents filed annually. At first glance, this would appear to be a significant problem for the U.S., which has for years maintained technological dominance in virtually every area. Thankfully, upon closer inspection, it is clear that the U.S. still leads the world thanks in part to the friendly stance it takes toward innovation.
According to the World Intellectual Property Organization (WIPO), between 2014 and 2023, China filed around 38,000 patent applications related to generative AI. More concerning, WIPO data suggests this trend is accelerating. Since 2017 alone, China has filed more AI patents than the rest of the world combined, one-quarter of which were filed in 2023. In contrast, the U.S. filed 6,300 AI patents over the same 2014-2023 timeframe. On paper, China would appear to be leading the world in generative AI technology by a wide margin.
Part of the reason for China’s percieved dominance in AI is that the Chinese government currently subsidizes the filing of patents. Filing 10 patents in China enables the filer to receive the equivalent of $14,000. As of 2024, all Chinese provinces and municipalities offer these subsidies but they are supposed to end in 2025. If that happens, the number of patents filed annually could change significantly.
Additionally, the pure volume of generative AI patents a country possesses does not reveal much about the state of innovation. According to the Centre for International Governance Innovation, the quality of Chinese patents is quite low. Only about ten percent have market value and researchers have not found these patents contribute much to socioeconomic development in China. In other words, China’s large quantity of patents says little about where it is technologically and more about its intellectual property strategy.
Since the vast majority of Chinese patents hold little value, looking at the bigger picture reveals factors more important to competitiveness. The U.S. remains the world leader in AI talent and the top destination for the best AI developers. This is a huge advantage in the global competition to develop better AI. The U.S. also has 60 percent of the world’s top AI institutions, indicating it leads in quality as well as quantity. While China is looking for ways to catch up, such as combining multiple weaker chips to gain the same capabilities as higher-end chips, the U.S. remains the world leader in AI innovation.
China is the indisputable leader in AI patents. However, those numbers aren’t everything. China’s large volume of patents more accurately reflect the country’s market-distorting incentive system than they do provide evidence of genuine innovation. The truth is that the U.S. remains the world leader in AI talent and innovation and lawmakers should embrace policies that contributed to this dominance rather than rush to regulate.
Trey Price is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.