Nvidia's AI Chip Market Share in China Declines as Huawei Gains Ground

Nvidia's dominance in China's data-center AI chip market is waning, with its market share dropping to 34% in the first half of 2026, as reported by IDC and highlighted by Reuters. This decline represents a significant 44% decrease in unit shipments compared to the same period last year, attributed largely to US export controls on advanced AI chips.

In contrast, Huawei has seen a surge in its market presence, increasing its share to 28% after delivering 572,000 units during the same timeframe, up from just over 300,000 units a year prior. The overall shipments in China's AI accelerator market reached 2.008 million units, with non-GPU accelerators outselling GPUs for the first time.

China's push for AI self-sufficiency and favorable policies for domestic manufacturers have contributed to the growth of Huawei and other local companies. Nine out of eleven tracked Chinese vendors reported year-over-year growth, indicating a robust shift in the market landscape.

As Nvidia grapples with a shrinking market share, the future will depend on whether it can regain its footing against Huawei and other emerging competitors in the AI chip sector.