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

The gap between American and Chinese artificial intelligence, once wide enough that US policymakers counted on it as a strategic buffer, has effectively closed, according to Stanford University's 2026 AI Index report.

“The US-China AI model performance gap has effectively closed,” the report said, noting that models from both countries “have traded the lead multiple times since early 2025.” 

The shift marks a sharp departure from earlier years when US labs dominated frontier capabilities. In February 2025, China’s DeepSeek-R1 briefly matched the best-performing US system, while by March 2026, Anthropic’s top model led by just 2.7%. 

Two systems, two strengths

Even as the gap narrows, the AI race is still uneven. The US leads in building top models and high-impact patents, while China is ahead in overall research output.

“China leads in publication volume, citations, patent output, and industrial robot installations,” the report said. 

This gap comes from two different ways of building AI. In the US, a few big private labs are leading the work and building the most advanced systems. In China, the focus is on scale, with strong activity across universities, companies and state-backed programmes.

The report shows the US built 50 major AI models in 2025, compared with China’s 30. This keeps the US ahead in cutting-edge systems. But China is catching up in research, with a rising share of highly cited papers and patents. 

China now accounts for 74.2% of all AI patents granted globally in 2024, 97,206 out of 131,121 globally. The United States, which held a 42.8% share as recently as 2015, has fallen to 12.1%. In publication volume, China accounted for 17.8% of all AI research papers in 2024, compared to 7.6% from the US. China's share of citations, a rough measure of research influence, reached 20.6%, while the US stood at 12.6%.

Meanwhile, among the top 100 most-cited AI papers globally, China's share has climbed from 33 in 2021 to 41 in 2024. The US, which held 64 spots in 2021, dropped to 46 in 2024.

Money, scale and the next phase

The US still dominates investment, with private AI funding reaching $285.9 billion in 2025, more than 20 times China’s disclosed private investment. However, the report cautions that this likely understates China’s total spending due to state-backed funding mechanisms. 

The US also created 1,953 newly funded AI companies in 2025, more than ten times the next closest country.