The Stanford Institute for Human-Centered Artificial Intelligence (HAI) has published the 2021 edition of its Artificial Intelligence Index Report, looking at the impact and progress of artificial intelligence (AI) in seven key areas: research and development, technical performance, economic issues, AI education, ethical challenges of AI applications, diversity in AI, and AI policy and national strategy. The report notes that private investment in AI substantially increased in 2020, although the number of newly funded companies decreased for the third year in a row. The greatest amount of private AI investment in 2020 was allocated to the field of ‘drugs, cancer, molecular, drug discovery’. Brazil, India, Canada, Singapore, and South Africa had the highest growth in AI hiring from 2016 to 2020. Synthetic media (deepfakes) are on the rise, with breakthroughs in the generation of synthetic text, imagery, and video demonstrating the progress of AI but also highlighting the potential for unethical or dangerous use. Diversity in AI is low; for instance, in 2019, 45% new US resident AI PhD graduates were white – by comparison, 2.4% were African American and 3.2% were Hispanic. For the first time, China surpassed the USA in the share of AI journal citations in the world. Ethical challenges of AI applications have become a bigger focus for the AI community, with a significant increase in papers mentioning ethics and related keywords between 2015 and 2020. At the same time, the field generally lacks benchmarks to measure or assess the relationship between broader societal discussions about technology development and the development of the technology itself. Moreover, researchers and civil society view AI ethics as more important than industrial organisations. Government interest in AI continues to be significant, as more and more countries have developed or are developing national AI strategies.