China Holds Almost All the World’s AI Patents

Written by Andrew Isbester | Editor

Almost 7 out of 10 filings are from the mainland. But there is a catch.

Baby boomers and a few older Gen Xers here and there likely still have memories of the arms race and then the space race in what is an increasingly distant 20th-century Cold War.

But now, a good two and a half decades into the new millennium, what do millennials and Gen Zers get? Trump’s quick, remorseless unwinding of Pax Americana, a global trade war, the proliferation of deepfakes and digital fraud, not to mention a searing AI race with very uncertain outcomes for all walks of life.

Winning Hands Down

But if that is the race of our era, a few things are becoming clear. China leads massively in AI patents, while the US invests more than any other independent, sovereign country.

A Visual Capitalist graphic published Tuesday makes the situation clear, with the mainland having almost 70 percent of all the patents granted in 2023.

Mainland Bound

The figures were sourced from records in PATSTAT Global provided by the European Patent Office (EPO).

The catch related to that surprisingly high number, however, is that most of China’s patent applications appear to be only made and protected within the mainland’s boundaries, something that is going to be a measure of relief to the other countries out there with some skin in the AI game.

Secular Trend Downwards

Still, China’s growth is remarkable as it only had a 13.4 percent share in AI patents as recently as 2010, and it is the only part of the world that has experienced any growth in that regard.

But the rest of the world is on a clear secular trend – down. The US had 40 percent of all patents in 2010, with that figure declining to 14.2 percent in 2023. The rest of Asia had a similar experience – a 2010 share of 37.2 percent that fell to 13.1 percent in 2023.

Precipitous Drop

Europe, for its part, lags the rest of the world on both counts. In 2010, it held 8.6 percent of successful patent applications, with that number experiencing a precipitous drop (from a very low base) to 2.8 percent in 2023.

The picture, however, looks decidedly different when it comes to investment. Another graphic, also released by Visual Capitalist on Tuesday, shows that total private investment between 2013 and 2024 was led by the US at almost half a trillion US dollars.

The DeepSeek Quandary

According to them, American investors raised almost $109 billion in 2024 alone, which is almost the same amount ($119 billion) that China raised in the entire 2013-2024 period.

The question is whether that five-fold difference is going to pay off or not, given the slight market valuation hiccup a certain mainland GenAI contender, DeepSeek, caused earlier this year.

Certain Embarrassment

Indeed, the once Magnificent 7 are in danger of joining the all but obsolete Web 3 and Metaverse in the pantheon of forgotten tech terms, while the rampant investment spend on last year’s oh so critical AI data centers invites a certain embarrassed squeamishness at quarterly earnings calls.

Pax Britannica Redux?

But let’s hope it all ends up paying off in a market-induced longer long-term, as there are some unexpected bright spots in the AI private investment space.

The UK, surprisingly, placed third worldwide with an investment of $28 billion, while medium-sized countries in the Asia Pacific region also had a high level of spending.

Major Gaps

South Korea came in ninth ($9 billion), Singapore 10^th ($7 billion), and Japan 12^th ($6 billion).

But there were also some interesting discrepancies. Canada (4^th), Israel (6^th), Germany (6^th), India (7^th) and France (8^th) all had a relatively high level of investment in the double-digit billions, while countries like Sweden (11^th, $7 billion) and Switzerland (15^th, $4 billion) were clearly punching below their weight.

No Urge to Innovate

As finews.asia has previously commented on, it is particularly surprising in the Swiss case, given the longstanding institutional emphasis on the importance of innovation to the country’s economic future. The discussions about innovation, usually in the rarified circles of finance and government, often point to the quality of its tertiary education as evidence, particularly in the science and technical disciplines.

But it all seems to have gone a bit awry, or at least something in the link between in-depth research and a marketable product is not working as it should. However, that may be something that proves true for China as well, particularly if their patents remain behind the closed borders of the mainland's so-called Great Firewall.