Six months ago, Nvidia barely had any competition in China's AI chip market. Now its share has slipped to 34%, and Huawei — the next biggest player — already holds 28% and is closing the gap fast.
The numbers come from a report by research firm IDC, cited by Reuters. Between January and June 2026, Nvidia shipped 678,000 AI accelerators to China, a 44% drop from a year earlier. Huawei nearly doubled its shipments over the same stretch, to 572,000 units. Four more Chinese chipmakers — Alibaba's T-Head, Cambricon, Baidu's Kunlunxin and Hygon — split the remaining 19% of the market.
The reason is straightforward: US export rules choke off Nvidia's most advanced chips, while Beijing separately requires its own companies to get approval before buying even the models Washington does allow. Caught in that squeeze, Chinese buyers are switching to homegrown chips en masse — nine of the eleven domestic suppliers IDC tracks grew their shipments this half.
The mix of demand is shifting too. Standard GPU shipments in China fell 26%, to 991,000 units, while specialized AI accelerators built for narrower training and inference jobs jumped almost 80%, to 1.016 million — exactly the segment where Huawei is gaining the most ground.
Nvidia CEO Jensen Huang hasn't hidden his frustration, saying the export policy "forced a US company to cede China's $50 billion AI chip market to Huawei." For Washington, that's an awkward side effect: restricting China's access to cutting-edge chips is also speeding up the rise of a domestic chip industry that had little chance against Nvidia before.
