Microsoft: Why the US is Falling Behind in AI Adoption

AI adoption accelerated rapidly in 2025. Agentic AI broke through to mass awareness, while large language models like ChatGPT and Claude continued to draw growing audiences.

Microsoft's AI Diffusion Report 2025 tracks rising usage across 30 countries, spotlighting the UAE's lead, South Korea's surge and the US' drop to 24th despite having the world's largest ChatGPT subscriber market, alongside a community-first plan to boost adoption.

Every country in the top 30 posted at least a 1.1% increase in the second half of 2025 (H2) compared with the first half (H1). The ranking is based on “AI User Share,” defined as the share of the total population using any generative AI product, with results shown for both halves of the year to track momentum.

Global leaders hold their ground

The top three markets remained unchanged throughout 2025.

The United Arab Emirates led overall with the highest share of its working-age population using AI tools, reaching 64% in H2 – up 4.6% from H1. Singapore ranked second with 60.9% using AI by the end of 2025, followed by Norway at 46.4% in H2.

South Korea recorded the strongest gains of any country in the rankings, jumping seven places from 25th to 18th, with 30.7% of its population now using AI. In H2 alone, it solidified its position as a global leader in adoption, with an 80% growth rate since late 2024 – outpacing both the global average and the US.

The country is now the second-largest ChatGPT subscriber market, supported by national integration policies, advances in Korean-language frontier models and widely-resonant consumer features.

US: Growth despite lower ranking

The US working-age population increased AI usage by 2% in H2, yet the country slipped from 23rd to 24th as others climbed.

This comes despite US strength in AI infrastructure and data centre construction. Silicon Valley hosts 120 data centres and its AI Hub, launched in September 2025, brings together developers, startups and business leaders.

Microsoft’s analysis explores why the US, with a population of 340 million, shows a smaller proportional AI user share than some nations.

Smaller populations, the report notes, tend to be more highly-digitised. The UAE illustrates this dynamic: with a population of about 11 million, nearly two-thirds of working-age residents use AI.

A 'community-first' push to boost US adoption

Following the report, Microsoft Vice Chair and President Brad Smith outlined a five-point plan to increase US AI usage through a “Community-First AI Infrastructure” approach – operating data centres responsibly and for local benefit.

The plan focuses on:

• Ensuring data centres don’t increase electricity prices
• Minimising water use and replenishing more water than they use
• Creating jobs for residents
• Adding to the tax base that funds local hospitals, schools, parks and libraries
• Strengthening communities by investing in local AI training and non-profits

Satya Nadella, CEO of Microsoft, adds: "As we continue to expand our AI infrastructure, we’re committed to being a good neighbour in the communities where we build and operate our data centres."

With roughly one in six people worldwide now using generative AI tools, Microsoft’s AI Diffusion Report 2025 highlights striking progress for a technology that only recently reached mainstream adoption.