Nvidia Loses AI Chip Market Share in China, Huawei Climbs to 28%

Nvidia remains the top supplier of data-center AI chips in China, but its dominance is eroding as local chipmakers advance rapidly. According to IDC data analyzed by Reuters, Nvidia's market share in China's AI chip market for data centers dropped to 34% in the first half of 2026. The company produced approximately 678,000 AI accelerators, a 44% decrease year-over-year.

Huawei emerged as Nvidia's most significant regional rival during this period. The Chinese firm shipped around 572,000 AI accelerators, up from over 300,000 the previous year, securing a 28% market share - just six percentage points behind Nvidia. Notably, nine out of the eleven Chinese chipmakers tracked by IDC experienced year-over-year growth.

Alibaba's T-Head held a 7% share, followed by Cambricon at 5%, Baidu's Kunlunxin at 4%, and Hygon at 3%. Continuing US export restrictions are reshaping this market, limiting Nvidia's ability to sell advanced chips in China. Chinese entities face approval hurdles when importing certain Nvidia processors adhering to existing restrictions.

Meanwhile, Beijing has actively promoted domestic chip production as part of its drive for technological self-sufficiency, providing more opportunities for companies like Huawei, Cambricon, and others to expand. Nvidia CEO Jensen Huang has frequently criticized US export restrictions on advanced AI chips, arguing that they are facilitating competitors, particularly Huawei, to capture a larger share of China's AI chip market, which he estimates to be around $50 billion. Nvidia has not commented on the latest IDC figures as of the report's publication.