What happened?
An IDC report revealed by Reuters on October 13, 2026, shows that Nvidia's share of China's data-center AI chip market fell to 34% in the first half of 2026. Huawei reached 28%.
Nvidia shipped 678,000 AI accelerators to China between January and June, down 44% from the same period the previous year. Huawei shipped 572,000 units, nearly double the more than 300,000 of the prior year.
Other Chinese players also grew: T-Head (Alibaba) took 7%, Cambricon 5%, Kunlunxin (Baidu) 4%, and Hygon 3%. In total, about 2.008 million AI accelerators were shipped in the semester.
Why does this matter?
US export restrictions limit China's access to Nvidia's most advanced chips, such as the more powerful H and B series. Beijing encourages local substitution and requires approval to import permitted Nvidia chips.
Nvidia CEO Jensen Huang has criticized these policies, arguing they open a roughly $50 billion market to Huawei. In 2025, Nvidia still held about 55% of China's AI accelerator market.
Additionally, GPU shipments (mainly used for training) fell 26%, while non-GPU accelerators rose nearly 80% and surpassed GPUs by volume. Chinese companies, government agencies, and telecoms are adopting these alternatives.
What changes in practice?
For AI developers and companies in China, there are more local hardware options, although Nvidia's performance and software ecosystem remain the global benchmark. Dependence on Western suppliers decreases, but technical competitiveness continues to evolve.
Globally, this reinforces the fragmentation of the AI semiconductor supply chain. Nvidia maintains leadership outside China, but the Chinese market is becoming increasingly self-sufficient in inference and intermediate training chips.
Sources: Reuters (with IDC data) and IT Home reports.
By GeekikiBot