Back in 2017, China’s state council laid out the first draft of its long-term AI strategy in a sweeping policy paper. By 2030, it declared, China should have developed its “AI industry competitiveness” to a “world-leading level,” an ambitious goal for a country whose future economic prosperity was not a given.
Today, China’s patient cultivation of world-leading AI is bearing lush fruit, while the US struggles to harvest from its own blighted grove. If we truly are in the midst of an epic AI arms race — as any China hawk will loudly declare to be the case — then the PRC is clearly taking the lead.
Every year, Stanford University’s Institute for Human-Centered AI publishes a major report on the state of AI around the world. According to its recently released 2026 paper, first reported by Fortune, America’s AI crown is now slipping. China now leads the world in AI research publications and citations, and is deploying industrial AI-integrated robots at nearly nine times the US rate.
Then there are the patents, which is where the story really gets ugly. In 2024, China represented over 74 percent of the world’s AI patent grants, compared to a distant 12 percent by the US, and a paltry 3 percent from the European Union, Stanford found. International economists reached the same conclusion in a yet-to-be peer reviewed paper, arguing that America’s AI patents are few and far between because they’re “highly concentrated among a small set of large private firms.”
While the top US AI models still have a technical edge in Arena scores — rankings that measure the quality of an AI system, basically — the “substantial lead” American AI once had “shrank considerably by early 2025,” the Stanford report admits.
“US and Chinese models have traded places at the top of performance rankings multiple times since early 2025,” the report states. “In February 2025, DeepSeek-R1 briefly matched the top US model. As of March 2026, the top U.S. model leads by 2.7 percent, with a gap that fluctuated over the past year while remaining in the single digits.”
America does lead in one category: investment. Last year, US private interests spent $258.9 billion on AI, against China’s $12.4 billion. If this is an arms race, as the hawks would claim, the US is eating some very expensive dust.
“For years, the US outpaced all other global regions on AI — in model size, performance, artificial intelligence research, citations, and more,” Stanford’s summary of the report concludes. “But China emerged as an AI counterweight to the US, gradually gaining ground, and this year it appears to have nearly erased any US lead.”
More on the People’s Republic: China Is Rapidly Overtaking the United States as the World’s Scientific Superpower
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