- China leads in generative AI patents, with over 38,000 filed
- US export bans and domestic innovation issues hinder China’s impact
- Chinese patents often focus on domestic markets rather than global innovation
China has emerged as the world’s leading creator of generative AI patents, but it is unable to implement many of its ideas due to US export prohibitions and long-standing issues with its domestic innovation culture.
In July, the UN’s intellectual property organization said that China had submitted more than 38,000 generative AI patents over the previous decade, more than any other country combined.
According to World Intellectual Property Organization (WIPO) data, Chinese corporations and institutions, including Tencent, Ping An Insurance, Baidu, and the Chinese Academy of Sciences, are among the top ten patent holders worldwide.
Four US companies are in the top ten, while Silicon Valley and US research institutions submitted only 6,276 inventions between 2014 and 2023. According to WIPO data, South Korea registered 4,155 inventions, followed by Japan with 3,409 and India with 1,350.
Despite this flurry of activity, China remains behind the US in terms of impact since the large number of patents only tells part of the story, according to Van Anh Le, an assistant professor of intellectual property law at Durham University in the United Kingdom.
“The mere number of patents filed or granted is frequently misunderstood as a direct measure of innovation. A high number of patents can be driven by causes other than new innovation, such as strategic filings, differing national policies, or even non-innovative motives,” Le added. She explained that patents are also intended to protect innovation but only sometimes ensure financial success.
Despite the reduced number of patents, US developers maintain a decisive advantage. According to Stanford University’s 2024 AI Index, the United States has produced the most “notable AI models” to date, with 61, compared to 21 in the European Union and 15 in China.
The most recent AI boom began with Google’s invention of the revolutionary “transformer” in 2017 – the neural network architecture that underpins generative AI, including its large language models (LLMs), such as OpenAI’s chatGPT. ChatGPT’s introduction in 2022 was another milestone, termed the “iPhone moment” for generative AI by Nvidia CEO Jensen Huang because it was when the issue became widely known.
While ChatGPT has been followed by dozens of competitors, including Baidu’s ERNIE bot in China, they appear to have yet to make the same impact.
Most patents are domestic.
Competing with Silicon Valley’s significant funds and resources has always been difficult. Still, it has gotten even more difficult since 2022, when the United States began placing export limitations on critical technologies such as the NVIDIA A100 processor, which has helped propel the present AI boom.
Although China filed far more generative AI patents than the United States, many of these Chinese patents did not and were unable to be translated into forces to help bring about the rise of LLMs and other fundamental AI models, according to Alex He, a senior fellow at the Center for International Governance Innovation (CIGI), a Canadian think tank.
He explained that China lacked the requisite vast processing capacity and billions and trillions of high-quality data parameters for large model training, preventing it from following the technological path of the ChatGPT-like model that OpenAI has launched.
Enterprises such as Intel and Nvidia have shifted to produce chips that meet US laws for the Chinese market. Still, Chinese enterprises are increasingly resorting to Huawei’s locally manufactured Ascend chip series, according to a June analysis from the US-based National Bureau of Asian Research.
Meanwhile, China’s AI business is turning inward and focused on the domestic market. Based on China’s historically low rate of overseas patent applications, he projected that it had only submitted 2,926 patents.
He indicated that many of China’s leading GenAI developers, including Tencent, Ping An Insurance, the Chinese Academy of Sciences, Alibaba, Baidu, and ByteDance, prioritize the domestic market as part of their business plan. Companies that file patents abroad, including Huawei, ZTE, and Vivo, have already established a footprint.
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Many of China’s generative AI patents were created for corporate purposes, such as boosting business operations or current apps.
He stated that only Baidu, well known internationally for its search engine, has focused on the most innovative AI research and development. Still, they now need more advanced AI processors to catch up.
According to He, generative AI patents led by China’s private tech sector are “better than most” and driven by “real innovative industry research” to catch up or cash in on demand. Still, he also notes a long-standing issue of rewarding numbers over quality.
According to Durham’s Le, developers and inventors may be incentivized to submit patents to secure government subsidies, individual promotions, or certification for their organization as a “national high-tech enterprise” rather than to preserve actual invention.
“The Chinese government sees itself as something akin to a large-scale startup incubator, thinking along the lines of a state-owned equivalent of a ‘Y Combinator’ – just with an outsized heft and a much longer-term investment horizon,” Le said, referring to the American startup accelerator that helped launch thousands of companies including Airbnb, Coinbase, Dropbox, Instacart, and Stripe.
