When I spoke with Lars recently, I emphasized the critical balance between using tools like AI and actually learning how to think, reason, and create. We touched on the incredible capabilities of AI, raising exciting possibilities and serious concerns. For example, AI-driven customer service can be frustratingly impersonal—I yelled at one for eight minutes earlier that day  just trying to reach a human. In education, some elite universities are already requiring handwritten essays again, like with Blue Books, to preserve that integrity. However, as I have written previously about AI and medicine, it has the potential to increase accessibility and the quality of care. 

You can find the whole conversation here.

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China is outpacing the rest of the world in artificial intelligence research at a time when AI is becoming a “strategic asset” akin to energy or military capability, according to a report from research technology company Digital Science.

The report – entitled DeepSeek and the New Geopolitics of AI: China’s ascent to research pre-eminence in AI – has been authored by Digital Science CEO Daniel Hook based on data from Dimensions, the world’s largest and most comprehensive database describing the global research ecosystem.

The news comes just a day after a report from Clarivate revealed that China is also leading the way in research output across G20 nations.

Dr Hook has analysed AI research data from the year 2000 to 2024, tracking trends in research collaborations and placing these within geopolitical, economic, and technological contexts. His report says AI research has grown at an “impressive rate” globally since the turn of the millennium – from just under 10,000 publications in 2000, to 60,000 publications in 2024.

Dr Hook’s key findings include:

• China has become the pre-eminent world power in AI research, leading not only by research volume, but also by citation attention, and influence, rapidly increasing its lead on the rest of the world over the past seven years.

• The US continues to have the strongest AI start-up scene, but China is catching up fast.

• In 2024, China’s AI research publication output matched the combined output of the US, UK, and European Union (EU-27), and now commands more than 40% of global citation attention.

• Despite global tensions, China has become the top collaborator for the US, UK, and EU in AI research, while needing less reciprocal collaboration than any of them.

• China’s AI talent pool dwarfs its rivals – with 30,000 active AI researchers and a massive student and postdoctoral population.

• The EU benefits from strong internal AI collaboration across its research bloc.

• China dominates AI-related patents – patent filings and company-affiliated AI research show China outpacing the US tenfold in some indicators, underscoring its capacity to translate research into innovation.

“AI is no longer neutral – governments are using it as a strategic asset, akin to energy or military capability, and China is actively leveraging this advantage,” Hook says. “Governments need to understand the local, national and geostrategic implications of AI, with the underlying concern that lack of AI capability or capacity could be damaging from economic, political, social, and military perspectives.”

Hook says China is “massively and impressively” growing its AI research capacity. Unlike Western nations with clustered AI hubs, he says China boasts 156 institutions publishing more than 50 AI papers each in 2024, supporting a nationwide innovation ecosystem. In addition, “China’s AI workforce is young, growing fast, and uniquely positioned for long-term innovation.”

He says one sign of China’s rapidly developing capabilities is its release of the DeepSeek chatbot in January this year. “The emergence of DeepSeek is not merely a technological innovation – it is a symbol of a profound shift in the global AI landscape. DeepSeek exemplifies China’s technological independence. Its cost-efficient, open-source LLM demonstrates the country’s ability to innovate around US chip restrictions and dominate AI development at scale.”

The report comments further on the AI research landscape in the US, UK and EU. It says the UK remains “small but globally impactful”. “Despite its modest size, the UK consistently punches above its weight in attention-per-output metrics.”

However, the EU “risks falling behind in translation and visibility”. “The EU shows weaker international collaboration beyond its borders and struggles to convert research into applied outputs (e.g., patents), raising concerns about its future AI competitiveness.”

Discover more in the full report: DeepSeek and the New Geopolitics of AI: China’s ascent to research pre-eminence in AI.

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Key Points

• Shares of Taiwan Semiconductor Manufacturing Co. (TSMC) and IBM have crushed the S&P 500’s returns over the last one year, three years, and five years.

• And TSMC stock has absolutely pulverized the broader market over the 10-year period.

• Shares of TSMC and IBM are currently yielding 1.26% and 2.31%, respectively.

Artificial intelligence (AI) is the biggest secular growth trend today. The global AI market will soar from $189 billion in 2023 to $4.8 trillion by 2033 — a 25-fold increase in a decade — according to a recent projection by the United Nations Conference on Trade and Development.

As with technology stocks in general, the vast majority of stocks that could be considered AI stocks either do not pay dividends or pay very small ones.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

While they are relatively rare, there are some top-performing AI stocks that pay decent dividends and have a good dividend payment history. These include the world’s largest semiconductor (or “chip”) foundry Taiwan Semiconductor Manufacturing Corp., or TSMC (NYSE: TSM), and International Business Machines, or IBM (NYSE: IBM), one of the world’s oldest large tech companies.

So, folks who like dividend-paying stocks and want to invest in AI — forgive the cliché — can have their cake and eat it too.

2 Top AI stocks that pay decent dividends

Data sources: Finviz.com and Yahoo! Finance. P/E = price to earnings. EPS = earnings per share. Data as of July 8, 2025.

TSMC: The world’s largest chip foundry

Taiwan Semiconductor Manufacturing produces chips for companies that contract out all or some of the manufacturing of chips that they design. As the world’s largest chip foundry, TSMC is the dominant company in the production of advanced AI chips, so it’s been significantly benefiting from the growth of the AI market and should continue to benefit.

TSMC’s customers includes most of the big names in chip companies — such as Nvidia, Broadcom, and Arm Holdings. It also produces chips for big tech companies that have designed their own chips, including Apple, which is widely considered TSMC’s largest customer, followed by Nvidia.

The company is off to a great start in 2025. In the first quarter, its revenue jumped 35% year over year to $25.5 billion, driven by continued strong AI-related demand. Better yet, its EPS surged 54% to $2.12. Its EPS growing faster than its revenue reflects its expanding profit margin.

On the Q1 earnings call, management reaffirmed its 2025 guidance that its revenue from AI accelerators will double year over year.

TSMC started paying cash dividends in 2004 and has never halted or reduced its dividend per share.

TSMC stock is trading at 24.2 times its forward projected EPS, which is reasonable for a stock of a company that Wall Street expects will grow EPS at an average annual rate of nearly 23% over the next five years.

IBM: Successfully transitioning to AI and other high-growth markets

IBM has been in a years-long transitioning mode, divesting of legacy businesses and investing in growth markets, notably cloud computing and AI. This transitioning resulted in its revenue declining, which in turn caused its profits and cash flows to also decrease. But Big Blue is back in growth mode.

In 2024, IBM’s revenue increased 3% in constant currency to $62.8 billion, driven by a 9% rise in software revenue, offset by declines of 1% and 3% in its consulting and infrastructure segments, respectively. Adjusted earnings per share (EPS) from continuing operations was up 7% year over year. Free cash flow (FCF) rose 13% year over year to $12.7 billion.

IBM’s generative AI book of business ended the year at $5 billion inception to date. (Generative AI enables users to quickly generate new content based on a variety of inputs. It’s the type of AI that’s largely powering the AI boom.)

The AI business is growing fast, increasing $2 billion from the third to the fourth quarter 2024. Moreover, it tacked on another $1 billion-plus in the first quarter of 2025 to bring its total to more than $6 billion. About one-fifth of this business comes from software and four-fifths from consulting, CEO Arvind Krishna said on the Q1 earnings call.

The company expects revenue growth to accelerate in 2025. For the year, it guided for annual revenue growth of at least 5% in constant currency and FCF of about $13.5 billion, or over 6% growth year over year.

IBM has a great dividend history. It’s increased its quarterly cash dividend for 30 consecutive years.

IBM stock is trading at 26.7 times forward projected EPS. This might seem quite pricey for shares of a company that Wall Street expects will grow EPS at an average annual pace of 6.3% over the next five years. However, investors can expect to pay a premium for stocks of companies that have great track records of raising their dividends.

Moreover, the stock might turn out to be less pricey than it currently seems. IBM has solidly beat the analyst consensus estimate for earnings in the last four quarters, with two of the beats being quite large. Given how fast the company’s AI business is growing, it could continue to solidly surpass earnings estimates.

Mark your calendars

TSMC is slated to release its Q2 2025 results before the market open on Thursday, July 17.

IBM is scheduled to release its Q2 results after the market close on Wednesday, July 23.

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