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The 2025 State of AI report reveals OpenAI's narrowing lead as Chinese models like DeepSeek and Qwen close the gap. Reasoning models defined the year, AI became a scientific collaborator, and 44% of US businesses now pay for AI tools—up from 5% in 2023. Meanwhile, geopolitical tensions intensify as the US pushes "America First AI" and China expands its open-source ecosystem.