China is rapidly catching up with the US in the development of state-of-the-art artificial intelligence, according to a new report.
Performance differences between leading AI models built in each country shrank to “near parity” in 2024, Stanford University’s 2025 AI Index Report concluded, while China led in terms of AI publications and patents.
The jump in performance in leading Chinese AI models comes amid attempts by the US to block China’s access to the semiconductors required for building advanced artificial intelligence.
Stanford researchers noted in the report that US chip sanctions have had an impact on the development of Large Language Models (LLMs) in China, however Chinese scientists have found a way to work around the restrictions in their pursuit to create human-level intelligence.
“The launch of DeepSeek’s V3 model in December 2024 garnered significant attention, particularly because it achieved exceptionally high performance while requiring far fewer computational resources than many leading LLMs,” the report stated.
“Top-tier AI models from the US have generally been far more computationally intensive than Chinese models... The top 10 Chinese language models by training compute have scaled at a rate of about three times per year since late 2021 – considerably slower than the five times per year trend observed in the rest of the world since 2018.”
China’s rise also comes despite a massive disparity in AI investment. Last year, US private investment in the technology was $109.1 billion – nearly 12 times larger than China’s $9.3 billion.
The US still leads in terms of quantity, producing 40 notable AI models compared to just 15 in China and three in Europe.
Stanford’s 456-page report also included another notable trend, showing that the number of AI-related incidents rose more than 50 per cent to reach a record high in 2024.
The incidents include ethical misuse of AI, such as self-driving cars causing fatalities or facial recognition systems leading to wrongful arrests.
One incident mentioned in the report involved a 14-year-old boy who died by suicide after “prolonged interactions” with a chatbot character.
“This case speaks to the ethical challenges of AI-driven companionship and the potential risks of deploying conversational AI without adequate oversight,” the report stated.
“While AI chatbots can offer emotional support, critics warn that without guardrails, they may inadvertently reinforce harmful behaviors or fail to intervene when users are in distress.”
