WASHINGTON—As nations race to achieve a global advantage in artificial intelligence, a new report from the Center for Data Innovation finds the United States leads in AI, with China coming in second—notwithstanding significant efforts to close the gap and dominate the field—and the European Union lagging behind.

However, China’s bold AI initiatives are poised to challenge U.S. dominance in the coming years.

Out of 100 total available points in the report’s scoring methodology, the United States leads with 44.2 points, followed by China with 32.3 and the European Union with 23.5.

“AI is the next wave of innovation, and overlooking this opportunity will pose a threat to a region’s economic and national security,” said Daniel Castro, the Center’s director. “Gaining an early lead in AI will boost a region’s economic competitiveness, but there are many factors they need to get right.”

The report examines six categories of metrics: talent (e.g., number of AI researchers), research (e.g., number of AI papers), development (e.g., number of AI start-ups), adoption (e.g., percent of firms adopting AI), data (e.g., amount of IoT data), and hardware (e.g., number of firms designing AI chips). The United States leads in talent, research, development, and hardware, while China leads in adoption and data. The EU does not lead in any category, though it is closely behind the United States in talent. The report offers policy recommendations for how the United States, China, and the EU can improve their AI capabilities.

“The United States is leading in AI today, but it should not rest on its laurels,” said Michael McLaughlin, the Center’s research analyst and the report’s lead author. “To maintain its lead, the United States should focus on policies that grow its domestic talent base, enable foreign AI talent to immigrate, and increase incentives for research and development.

Read the report.