lead becomes even larger, while China drops to third place, behind the European Union. Nonetheless, when controlling for the size of the labor force in the three regions, the current U.S. This order could change in coming years as China appears to be making more rapid progress than either the United States or the European Union. China comes in second, and the European Union lags further behind. It finds that despite China’s bold AI initiative, the United States still leads in absolute terms. This report compares China, the European Union, and the United States in terms of their relative standing in the AI economy by examining six categories of metrics-talent, research, development, adoption, data, and hardware. Many nations are racing to achieve a global innovation advantage in artificial intelligence (AI) because they understand that AI is a foundational technology that can boost competitiveness, increase productivity, protect national security, and help solve societal challenges.