China wrestles with ‘quantity over quality’ in generative AI patents

China has filed for more patents than any other country, but US export controls are just one of the hurdles it faces.

Many of China’s generative AI patents were also developed for internal use, such as improving company business operations

China has become the world’s leading producer of generative AI patents, but it is facing challenges in turning many of its ideas into reality due to US export controls and persistent issues with its domestic innovation culture.

In July, the UN’s intellectual property agency reported that over the past decade, China had filed more than 38,000 generative AI patents—more than all other countries combined.

Chinese companies and institutions rank among the global top 10 patent holders, with names like Tencent, Ping An Insurance, Baidu, and the Chinese Academy of Sciences leading the charge, according to data from the World Intellectual Property Organization (WIPO).

Four US companies also make the top 10, but Silicon Valley and US research institutions filed just 6,276 patents over the same period from 2014-2023. South Korea, in third place, filed 4,155 inventions, followed by Japan with 3,409, and India with 1,350, according to WIPO data.

Despite this surge in patent activity, China still lags behind the US in terms of impact, as the sheer number of patents tells only part of the story, according to Van Anh Le, an assistant professor in intellectual property law at Durham University in the United Kingdom.

“The sheer number of patents filed or granted is often mistakenly seen as a direct indicator of innovation. A high volume of patents can be driven by factors unrelated to groundbreaking innovation, such as strategic filings, differing national policies, or even non-innovative motives,” Le explained. She added that while patents are designed to protect innovation, they do not necessarily guarantee commercial success.

Despite having fewer patents overall, US developers maintain a clear lead. Stanford University’s 2024 AI Index named the US as the undisputed home of the most “notable AI models” to date, producing 61 compared to 21 from the European Union and 15 from China.

Baidu is one of the most innovative Chinese companies in generative AI

The latest AI boom began with Google’s development of the groundbreaking "transformer" in 2017—a neural network architecture that underpins generative AI, including large language models (LLMs) like OpenAI’s ChatGPT. When ChatGPT was released in 2022, it marked another major breakthrough, described as the "iPhone moment" for generative AI by Nvidia CEO Jensen Huang, as it brought the technology into the public spotlight.

Although ChatGPT has since been followed by dozens of competitors, including Baidu’s ERNIE bot in China, none have made quite the same impact.

Most patents domestic

Competing with Silicon Valley’s deep pockets and resources has always been a challenge, but it has become more challenging since 2022 when the US began imposing export controls on key tech like the NVIDIA A100 chip that has helped power the latest AI boom.

“Although China filed the most generative AI patents in the world, far more than the US, many of these patents have not been effectively translated into advancements that contribute to the rise of large language models (LLMs) and other foundational AI technologies,” said Alex He, a senior fellow at the Center for International Governance Innovation (CIGI), a Canadian think tank.

“This is because China lacks the enormous computational power and the billions or trillions of high-quality data parameters needed for large model training, which has prevented the country from following the technological path pioneered by OpenAI with models like ChatGPT,” he told Al Jazeera.

While companies like Intel and Nvidia have shifted to produce chips that comply with US regulations for the Chinese market, Chinese companies are increasingly turning to the locally-made Ascend chip series from Huawei, according to a June report from the US-based National Bureau of Asian Research.

Meanwhile, China’s AI industry is increasingly concentrating on the domestic market. He estimated that it has filed only 2,926 patents overseas, reflecting China’s historically low rate for international applications.

He suggested that many of China’s leading generative AI developers, including Tencent, Ping An Insurance, the Chinese Academy of Sciences, Alibaba, Baidu, and ByteDance, are primarily focused on the domestic market as part of their overall business strategy. In contrast, companies that are filing patents abroad, such as Huawei, ZTE, and Vivo, already have a significant international presence.

Many of China’s generative AI patents were developed for internal purposes, such as enhancing business operations or improving existing apps.

He noted that while Baidu, known internationally for its search engine, has been at the forefront of innovative AI research and development, it currently lacks the advanced AI chips needed to fully catch up.

He acknowledged that China’s generative AI patents, driven by the private tech sector, are "better than most" and reflect "real innovative industry research" aimed at meeting demand. However, he also pointed out a persistent issue of prioritizing quantity over quality.

Developers and inventors might be motivated to file patents to secure government subsidies, earn individual promotions, or achieve certification as a “national high-tech enterprise,” rather than to protect genuine innovations, according to Durham’s Le.

“The Chinese government sees itself as a large-scale start-up incubator, akin to a state-owned version of ‘Y Combinator’—but with significantly more resources and a much longer-term investment perspective,” Le said, referring to the American startup accelerator that has launched companies like Airbnb, Coinbase, Dropbox, Instacart, and Stripe.