China has made significant progress in closing the gap with the United States in artificial intelligence (AI) capabilities, according to a new report from the Stanford Institute for Human-Centered Artificial Intelligence (HAI). The findings highlight a rapidly evolving dynamic in the global tech landscape, where AI is increasingly seen as a cornerstone of economic and geopolitical power.

China’s Progress in AI Model Performance

The report, presented by Ruffin Walz, the executive director of Stanford HAI, reveals a striking reduction in the quality disparity between AI models developed in China and those in the United States. As of 2025, the U.S. led with 50 major AI models compared to China’s 30. However, the performance gap between these models, once considerable, has greatly diminished. Walz noted during an interview that the models from China are now "neck and neck" with their American counterparts, a development that underscores the rapid strides Chinese tech firms and researchers have made.

Key to this progress, according to the report, is China’s embrace of an open-source approach to AI development. By sharing foundational technologies and tools across its ecosystem, China has fostered a collaborative environment that accelerates the refinement and application of AI models. This strategy has allowed Chinese organizations to build on each other’s advancements, creating what Walz called "a vibrant ecosystem." The collaborative method stands in contrast to some of the proprietary tendencies in the United States, where intellectual property protection and competitive market dynamics can sometimes inhibit cross-organizational synergy.

Public Opinion: A Factor in AI Adoption

An intriguing aspect of the report is its examination of public opinion on AI in both countries. In China, AI technology enjoys an 84% favorability rating among the public, compared to 38% in the United States. This stark divide in perceptions could be influencing how readily the technology is integrated and trusted in each country.

Walz attributes the low favorability in America to what he described as a "big hype cycle." On one hand, there is enthusiasm that AI might revolutionize industries, but on the other hand, fears about job displacement and other societal disruptions are prevalent. Americans appear torn between seeing AI as a promising tool or a potential threat. By contrast, Chinese public sentiment leans heavily toward optimism, fueling greater adoption and experimentation with the technology.

AI Adoption in U.S. Companies

Despite public skepticism, the adoption of AI tools in U.S. companies is robust. According to the report, 88% of American companies now utilize AI in some capacity. Businesses from diverse sectors are finding ways to deploy AI, whether it’s streamlining workflows, automating repetitive tasks, or enhancing decision-making processes.

For instance, clinicians are using AI to assist with diagnostics and treatment planning, while manufacturers apply it to optimize supply chain logistics and improve factory efficiency. AI is described as an "enabling" technology, allowing individuals and organizations to increase productivity. The report noted that firms leveraging AI are producing three times more research papers and earning five times more academic citations, a clear indicator of AI-driven innovation.

The Bigger Picture and Broader Implications

The narrowing of the AI gap has broad implications for the global tech race. AI capabilities are not limited to commercial applications—they directly influence national defense, healthcare, and critical infrastructure. Mastery in AI is increasingly viewed as a prerequisite for global influence in the 21st century. While the United States remains a leader in innovation and foundational research, China’s emphasis on scaling and wide-scale implementation continues to challenge America’s dominance.

However, there is still a clear cultural distinction in how the two countries approach AI. China’s centralized policies and top-down encouragement for AI development align well with its long-term technological ambitions. The U.S., on the other hand, relies on a more decentralized, private-sector-driven model, where competition often takes precedence over collaboration.

What Needs to Change?

Walz suggested that the U.S. could benefit from adopting certain elements of China’s collaborative approach. By encouraging more open-sharing models, American companies could foster innovation without compromising competitiveness. Yet, cultural and systemic barriers may slow such efforts. Public uncertainty about AI also needs to be addressed with "better and more nuanced information," according to Walz. Bridging the knowledge gap and countering misinformation about AI could help to bring public perception more in line with the optimism seen in China.

Looking Ahead

As AI continues to evolve, the competition between the United States and China in this domain is not just about who builds better models, but also about whose models are more widely adopted and trusted. The Stanford HAI report underscores the importance of not only excelling in research but also fostering an ecosystem that supports collaboration, adoption, and public trust.

The findings challenge U.S. policymakers and businesses to reassess their approach to AI development. If the public’s trust in AI remains low, and if collaboration within the industry lags, the U.S. risks losing its edge in a field that is bound to shape the global order for decades to come. China’s progress serves as a wake-up call, emphasizing that success in AI is as much about mindset and ecosystem as it is about technology itself.