Nvidia’s China AI Chip Market Share Falls as Huawei Gains Ground

Nvidia is losing ground in China’s artificial intelligence chip market as local technology companies strengthen their position amid continuing US export restrictions. According to data from market research firm IDC reported by Reuters on October 13, 2026, Nvidia held 34% of China’s data-centre AI accelerator market during the first half of the year. This represented a significant decline as Chinese chipmakers increased shipments and local businesses explored alternatives to US-designed processors. Nvidia’s position in China has been affected by restrictions on the export of advanced semiconductors, limiting the range of products it can legally supply. At the same time, Beijing has encouraged domestic companies to develop and adopt locally produced AI chips, supporting the growth of China’s semiconductor industry.

IDC data showed that Nvidia shipped approximately 678,000 AI accelerators in China between January and June 2026, representing a 44% decline compared with the same period a year earlier. AI accelerators are specialised processors designed to handle the demanding calculations required to train and operate artificial intelligence models. Nvidia has become a major supplier of these chips worldwide because of its powerful hardware and software ecosystem. However, US restrictions have prevented Chinese customers from accessing some of its most advanced products, creating uncertainty for businesses planning large AI infrastructure projects. Nvidia CEO Jensen Huang has repeatedly criticised the restrictions, arguing that they are causing American companies to lose business opportunities while encouraging Chinese competitors to improve their own technologies.

Huawei has emerged as Nvidia’s most significant domestic competitor in China’s AI accelerator market. According to IDC, Huawei shipped approximately 572,000 AI accelerators during the first half of 2026, giving it a 28% market share. Its shipments increased from more than 300,000 units during the corresponding period in the previous year. Other Chinese chipmakers also recorded growth, including Alibaba’s T-Head, Cambricon, Baidu’s Kunlunxin and Hygon. T-Head accounted for 7% of the market, followed by Cambricon with 5%, Kunlunxin with 4% and Hygon with 3%. Nine of the 11 Chinese chipmakers tracked by IDC increased their shipments year over year, demonstrating the growing importance of domestic suppliers as China attempts to reduce its dependence on foreign semiconductor technology.

Another important development is the growing use of AI accelerators that are not traditional graphics processing units, or GPUs. IDC reported that total AI accelerator shipments in China reached approximately 2.008 million units during the first half of 2026. GPU shipments declined by 26% to 991,000 units, while shipments of other AI accelerators increased by nearly 80%, reaching approximately 1.016 million units. These alternative processors are often designed for specific workloads, including running already-trained AI models. Huawei, T-Head, Kunlunxin and Cambricon collectively accounted for 95% of this non-GPU segment. Government agencies, telecommunications companies and internet businesses are among the organisations adopting these systems. The figures suggest that China’s AI infrastructure market is becoming more diverse, with customers increasingly considering the performance of entire computing systems rather than relying exclusively on individual high-performance GPUs.

The changing market could have long-term implications for Nvidia, Huawei and the global semiconductor industry. IDC expects China’s total AI accelerator shipments to increase by 19% in 2026, even as GPU shipments are projected to decline by 9%. This indicates that demand for AI computing infrastructure may continue growing despite restrictions affecting particular categories of chips. For Nvidia, the challenge is to maintain its technological advantage while navigating geopolitical barriers that limit its access to one of the world’s largest technology markets. For Huawei and other Chinese manufacturers, the opportunity lies in improving chip performance, software compatibility and the ability to build large-scale computing clusters. Although the latest figures show Nvidia losing market share in China, they do not establish that its global leadership has ended. Instead, they highlight how export controls and domestic investment are reshaping competition in the international AI chip industry.