Why Nvidia Is Losing Ground to Huawei in Chinas AI Chip Race
IDC data reported by Reuters shows Nvidia's share of China's data-centre AI chip market fell to 34% in the first half of 2026, with shipments down 44%, while Huawei shipped 572,000 accelerators for a 28% share as export controls and Beijing's push for domestic chips reshape the market.
Nvidia still leads China's AI chip market, but its grip is loosening fast. According to an IDC report seen by Reuters, the company's share of China's data-centre AI chip market fell to 34% in the first half of 2026. It shipped about 678,000 AI accelerators in the period, a 44% drop from a year earlier, as US export controls limited what it can sell.
Huawei is the main beneficiary. It shipped 572,000 accelerators, up from more than 300,000 a year earlier, for a 28% share of a market that reached 2.008 million units in total. The shift runs deeper than one rivalry. A few details from the data show how:
- GPU shipments fell 26% to 991,000 units, while non-GPU accelerators rose nearly 80% to 1.016 million, overtaking GPUs by volume
- Alibaba's T-Head held 7%, Cambricon 5%, Baidu's Kunlunxin 4% and Hygon 3%, and nine of the 11 Chinese chipmakers IDC tracks increased shipments
- IDC said competition is shifting from single-chip performance to system-level capability, meaning how well chips work together in a cluster, which can favor vendors selling a whole hardware-and-software stack
Two policies explain most of the swing. Washington has barred China's access to Nvidia's most powerful chips, and Beijing has promoted domestic alternatives while requiring Chinese companies to seek approval before importing even compliant Nvidia parts.
Jensen Huang has repeatedly argued the curbs forced a US company to cede China's $50 billion AI chip market to Huawei. One limit on the data: IDC did not say which Nvidia products make up its 34%, or whether that includes restricted chips such as the B200 and B300 that have been smuggled into the country.
The market itself is not shrinking, with IDC expecting total accelerator shipments in China to grow 19% this year even as GPU shipments fall 9%. Demand for computing power is rising, and the open question is how much of it Nvidia will be allowed to serve.
