Nvidia's China AI chip market share falls to 34% as Huawei gains ground

Nvidia's share of China's data-center artificial intelligence chip market fell to 34% in the first half of 2026, as the company's shipments in the country dropped 44% year-over-year, according to International Data Corporation report data cited by Reuters.

The California-based semiconductor company shipped 678,000 AI accelerators to Chinese customers between January and June 2026. AI accelerators are specialized semiconductors used to train and run large artificial intelligence models.

The shipment drop followed tighter export restrictions by the US government that limited the sales of Nvidia's highest-performing chips in China. In addition, domestic Chinese policies required local companies to get regulatory approval before purchasing export-compliant Nvidia processors, while encouraging buyers to choose domestic suppliers.

Nvidia Chief Executive Officer Jensen Huang criticized the American regulatory restrictions, saying that US policy impacted the company's position in the Chinese market.

"The policy forced a US company to cede China's US$50 billion AI chip market to Huawei," Huang said.

Domestic Chipmakers Gain Market Share

Chinese suppliers filled much of the demand created by restrictions on foreign silicon. Huawei shipped 572,000 AI accelerators in China during the first half of 2026, up from slightly more than 300,000 units in the same period of 2025. The increase brought Huawei's share of China's data-center AI processor market to 28%, closing the gap with Nvidia to six percentage points.

Other domestic manufacturers also took market share. T-Head, the chip design unit of Alibaba, reached a 7% market share in the first half of 2026. Cambricon Technologies took 5%, Baidu Group's Kunlunxin accounted for 4%, and Hygon Information Technology held 3%. Overall, nine of the 11 Chinese semiconductor suppliers tracked by IDC increased their shipment volumes year-over-year.

Product Demand Shifts to Non-GPU Hardware

Total AI accelerator shipments across China reached 2.008 million units in the first half of 2026. IDC expects full-year shipment volumes across the country to expand by 19%.

The report highlighted a shift in the types of hardware purchased by Chinese enterprises. Shipments of graphics processing units, long the standard silicon architecture for model training, dropped 26% year-over-year to 991,000 units in the first half. IDC projects total GPU shipments in China will fall 9% over the full year.

In contrast, shipments of non-GPU AI accelerators designed for specialized tasks such as model execution and inference grew nearly 80% to 1.016 million units, outstripping GPU volume. Four domestic manufacturers—Huawei, T-Head, Kunlunxin, and Cambricon—supplied 95% of those non-GPU chips, which were deployed by telecommunications providers, internet companies, and government entities.