Where AI Is Now: Smaller, Better, Cheaper Models
A state of the AI industry report shows that 2024 was a breakthrough year for small, sleek models to rival the behemoths
Top AI models’ performance is improving quickly, and the competition between them is growing ever fiercer.
The artificial intelligence (AI) race is heating up: the number and quality of high-performing Chinese AI models is rising to challenge the US lead, and the performance edge between top models is shrinking, according to an annual state of the industry report.
The report highlights that as AI continues to improve quickly, no one firm is pulling ahead. On the Chatbot Arena Leaderboard, which asks users to vote on the performance of various bots, the top-ranked model scored about 12% higher than the tenth-ranked model in early 2024, but only 5% higher in early 2025 (see ‘All together now’). “The frontier is increasingly competitive — and increasingly crowded,” the report says.
The Artificial Intelligence Index Report 2025 was released today by the Institute for Human Centered AI at Stanford University in California.
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Nature; Source: AI Index Report 2025
The index shows that notable generative AI models are, on average, still getting bigger, by using more decision-making variables, more computing power and bigger training data sets. But developers are also proving that smaller, sleeker models are capable of great things. Thanks to better algorithms, a modern model can now match the performance that could be achieved by a model 100 times larger two years ago. “2024 was a breakthrough year for smaller AI models,” the index says.
Bart Selman, a computer scientist at Cornell University in…
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