China Leads on Generative AI Patents, but What Does that Mean?

The answer hinges on the quality of the patents.

Alex He. Centre for International Governance Innovation. December 19, 2024.

China is far ahead of the United States and other countries in terms of generative artificial intelligence (AI) patent applications, according to the Patent Landscape Report issued by the UN World Intellectual Property Organization (WIPO) in July 2024. This raises the question: Could this be a game changer in the ongoing global AI arms race? Or is it simply an extension of China’s “quantity first” patent strategy into a new domain?

The answer hinges on the quality of these generative AI patents — specifically, how many patent filings will be granted and commercialized into real-world applications, and whether they will have domestic or international relevance. Much also depends on whether these patents will be critically useful to the current technological trajectory of AI development, which is based on transformer neural network (deep learning) architecture and relies on the enormous computing power and high-quality data needed to train generative AI models.

Since 2011, China has become the world leader in patent applications. It has been a global patent power since 2019, as measured by the number of internationally filed patents under the Patent Cooperation Treaty (PCT) administrated by WIPO. However, the impressive figures do not necessarily position China at the forefront of technological and industrial development. Leading in patent applications does not automatically translate into being the global leader in technology and innovation.

Indeed, China’s patent strategy and related evaluation mechanisms have historically emphasized the number of applications, often at the expense of patent quality. This politically motivated, award-oriented patent policy is deeply entrenched in China’s institutions and unlikely to change easily. Nevertheless, several new developments warrant consideration when assessing the quality of Chinese generative AI patents.

First, the private sector — represented by major tech companies such as Tencent, Baidu, Alibaba and

Huawei — has become a significant driver of the increase in China’s generative AI patent applications, particularly in subdomains such as computer vision, natural language processing and AI models.

Second, there have been positive trends in key factors that determine patent quality, including the grant ratio and commercialization rate. In 2023, the patent grant ratio for Chinese patent applications was 55 percent (calculated based on WIPO’s 2023 country profile for China), marking an increase of 25 percent, compared to 30 percent in 2019, and indicating a fourth consecutive year of double-digit growth. The commercialization rate for Chinese enterprises, particularly in high-tech sectors, has also seen notable improvement, as reported in the 2023 China Patent Research Report.

One reason the quality of China’s generative AI patents may be generally better than most of its patents is that generative AI is an emerging technological field, with substantial contributions from major private tech firms such as Tencent, Baidu, Alibaba, ByteDance and Huawei. Additionally, reputable state-owned companies, such as Ping An Insurance and State Grid, along with universities and institutions, including the Chinese Academy of Sciences, Tsinghua University and Zhejiang University, have also made significant contributions. In other words, the uptick in patent applications is largely driven by genuine innovative research and development (R&D) in a frontier area, aimed at profit and technological catch-up, which minimizes the likelihood of spurious or low-value patent applications motivated by political incentives.

However, challenges akin to those affecting other types of patents in China persist in the field of generative AI.

While the quality of Chinese patents has improved — particularly the quick increase in

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