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

Nvidia’s share of China’s data-centre artificial intelligence (AI) chip market fell to 34% in the first half of 2026 as US export restrictions curbed supplies and domestic rivals, led by Huawei, expanded their presence, according to an IDC report seen by Reuters.

Nvidia shipped 678,000 AI accelerators in China between January and June, down 44% from a year earlier, IDC data showed. AI accelerators are specialised processors designed to train and run AI models.

The decline highlights the growing challenges facing Nvidia in the world’s second-largest economy, where Washington has restricted access to its most powerful AI chips. Beijing has also encouraged the adoption of domestically developed alternatives and required Chinese companies to obtain approval to import Nvidia chips that comply with US export rules, Reuters reported.


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Nvidia Chief Executive Officer Jensen Huang has repeatedly criticised Washington’s export restrictions, arguing that the policies have forced the US chipmaker to surrender opportunities in China’s $50 billion AI chip market to Huawei.

IDC did not specify which Nvidia products accounted for its 34% market share or whether the figure included advanced chips such as the B200 and B300, which are barred from export to China but have reportedly been smuggled into the country. Nvidia did not respond to a request for comment, Reuters reported.

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Huawei expands market share

Huawei shipped 572,000 AI accelerators in the first half of 2026, up from more than 300,000 a year earlier, securing 28% of China’s overall market, according to IDC.

Alibaba’s chip-design unit T-Head accounted for 7% of the market, followed by Cambricon with 5%, Baidu’s Kunlunxin with 4% and Hygon with 3%.

Nine of the 11 Chinese chipmakers tracked by IDC increased shipments from a year earlier, underscoring the momentum behind Beijing’s push to develop a domestic semiconductor industry amid restrictions on access to advanced US technology.

Non-GPU chips overtake GPUs by shipments

Total shipments of AI accelerators in China reached 2.008 million units in the first half of 2026, IDC data showed.

Shipments of graphics processing units (GPUs), the processors most widely used to train AI models, fell 26% to 991,000 units as supplies of products permitted for sale in mainland China remained limited.

By contrast, shipments of other AI accelerators rose nearly 80% to 1.016 million units, surpassing GPUs by volume for the first time in the reported period. These processors include chips designed for specific AI workloads, such as running already-trained models.

Huawei, T-Head, Kunlunxin and Cambricon together accounted for 95% of the non-GPU segment, which IDC said was being adopted by government agencies, internet companies and telecommunications providers.

The shift also reflects changing priorities in China’s AI computing industry. According to IDC, competition is increasingly centred on system-level capabilities, including how effectively chips operate together in large computing clusters, rather than the performance of individual processors alone, Reuters reported.

China AI chip shipments expected to grow

IDC expects total AI accelerator shipments in China to increase 19% in 2026, even as GPU shipments decline 9%.

The contrasting outlook points to a market increasingly shaped by domestic chipmakers and alternative processor architectures as export restrictions constrain Nvidia’s access to China.

While Nvidia remains a major supplier, Huawei’s expanding shipments and the rapid growth of non-GPU accelerators suggest that Chinese technology companies are increasingly turning to local suppliers to meet rising demand for AI computing capacity, Reuters reported.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)