AI patent trends signal tomorrow’s technologies

The latest patent data reveals where artificial intelligence is heading in the global tech race and explains how, and why, China is setting the pace, explains Ana Neves of Inventa.

Artificial intelligence (AI) is the ultimate buzzword at the moment. But from a patent-based perspective, it is more than just the new fad: it is a pointer to technological developments and signals what consumers should expect from new products coming to the market in the near future.

For all the patent attorneys out there, it is also an indicator of the technologies we will be expected to deal with and translate into patent documents. So let’s have a look at what has been happening in the past few years.

When it all started

Publication of AI-related patents started to gain traction in 2016 (6,004 publications) and 2017 (11, 334 publications), with a consistent increase in following years (Figure 1).

We are still to reach the peak in publications: the highest number of patents published to date was recorded last year with 16,6274 patent documents—with no sign of a slowing down in AI-related patent filings.

Where do patents come from?

The majority of publications comes from the Chinese Patent Office (CNIPA) with 49,6811 patents, representing 64.3% of all publications. Second place is the US Patent and Trademark Office (USPTO), representing 16.9% of filings (Figure 2).

Publications from the European Patent Office, German Patent and Trademark Office and UK Intellectual Property Office combined amount to 4% of all publications, behind publications from the Korean Intellectual Property Office, which correspond to 5.9% of publications. Finally, Japan (2.4%), Australia (0.6%) and Canada (0.6%) complete the list of offices with the highest number of AI-based patents published.

Who is currently filing patents on AI?

The highest number of publications coming from China is directly related to the companies filing the patents, with seven out of the top 10 companies being Asia-based companies. However, the top owner of patents for AI-based technologies is the US-based company International Business Machines (IBM) with 12,092 patents. Microsoft, with 5,968, and Google, with 5,758, complete the list of companies with main offices not based in Asia (Table 2).

Table 2: Number of patent publications per company

Samsung Electronics is the first Asia-based company on the list, taking second place in the top 10 companies researching and filing patents on AI technologies followed by Tencent Tech in fifth place and Huawei in seventh. Surprisingly, two Chinese universities show up in the list of top patent owners in positions six and 10, respectively.

What is China doing differently?

China has been taking a series of steps in support of technology companies from government guidelines to regulation and financial initiatives to support tech companies.

Guidelines: enhancing financial services for technology companies

Central to Chinese efforts are new guidelines from several Chinese government bodies (including the National Financial Regulatory Administration) focused on enhancing financial services for technology firms.

These guidelines aim to eliminate capital flow bottlenecks, allocate more financial resources for tech innovations, and prioritise early-stage investments with sustained support for small and micro-sized enterprises over a five-year period.

Banks and insurers are called to align their financial services with high-priority innovation areas, offering flexible loan terms, improved insurance coverage, and actively participating in venture capital to support the technological advancement of enterprises.

This comprehensive approach is part of China’s ongoing financial reforms targeting technology and innovation sectors.

The guidelines set a five-year goal for banks and insurers to align financial services with high-priority innovation areas, encouraging more tech-related credit, improved insurance coverage for innovations, and greater venture capital cooperation.

They also emphasise increased credit lending, flexible loan terms, extended loan periods, and expanded insurance and venture capital roles in supporting technology development.

Furthermore, they call for a pilot programme for IP financing to incentivise the innovation ecosystem.

Promoting start-ups

Driven by government incentives and increased venture capital (VC) investment, China has fostered one of the world's largest numbers of unicorns, second only to the US. These developments align with governmental goals to promote strategic and emerging industries, such as AI, biotechnology, and semiconductors, to promote innovation and address unemployment among young people.

China’s startup ecosystems, including in cities such as Beijing, Shanghai, and Shenzhen, house significant numbers of unicorn companies—particularly in sectors such as biotechnology, semiconductors and AI.

Despite an overall cooling in VC investments recently, hard-tech sectors such as semiconductors remain investment priorities.

The Chinese government supports startups through various policies, offering tax incentives to micro, small, and medium-sized enterprises and cultivating environments for entrepreneurship.

These include reduced corporate income tax rates and deductions for R&D expenses to encourage technological innovation.

Regulatory environment

In her book, High Wire: How China regulates Big Tech and governs Its economy, Angela Zhang describes China’s regulatory framework for tech firms as a “dynamic pyramid model”, highlighting the adaptable nature of the technology ecosystem and its capacity to respond to rapid shifts in the market when influenced by centralised decision-making.

As AI is a fairly recent field, the author suggests that “China's AI regulations will initially be lax until significant issues arise”.

Challenges ahead

However, China’s ambition to achieve technological dominance on the global stage is not without challenges due to global economic uncertainties and geopolitical tensions, particularly the US introduction of export controls affecting key tech sectors.

China’s strategy to strengthen its technology sector is now affected by recent US export policies, especially in the semiconductor industry which is intrinsically related to AI-based technologies

In response, China is focusing on enhancing domestic innovation to achieve technological self-reliance.

China’s successful strategy with regard to AI-based technologies is translated into the number of patent publications.

To what extent the patented inventions will become critical to the marketed innovations of the future is still to be seen.

For foreign investors and ecosystem participants, understanding China’s strategic priorities and adapting to these policy and market developments will be crucial for successful engagement with its tech ecosystem.

Ana Neves is a patent consultant at Inventa, and can be contacted at aneves@inventa.com