Nvidia’s China AI chip share nears zero as Huawei takes the lead

Nvidia ↘ 0.99% has effectively lost its dominance in China's artificial intelligence chip market to Huawei, as U.S. export controls and Beijing's push for domestic technology reshape the global semiconductor landscape.

A Market Transformed

Chinese companies like Huawei have overtaken Nvidia in what was once a near-monopoly market, according to reporting from the Associated Press and The Washington Post published on Sunday. Nvidia once controlled roughly 95% of China's AI chip market, but that figure has collapsed under successive rounds of U.S. export restrictions. According to analysis from Bernstein Research, Nvidia's share of the Chinese AI chip market is expected to fall to around 8% in 2026, while Huawei's rises to approximately 50%.apnews+3

Nvidia CEO Jensen Huang acknowledged the shift in May, stating that the company has "largely conceded" China's AI chip market to Huawei. "They have experienced a record year, and they are likely to have an exceptional year ahead," Huang said of Huawei. "We have effectively conceded that market to them".cnbc

Policy Accelerates the Shift

The transformation has been driven by both U.S. restrictions and Chinese industrial policy. The Trump administration's directive in April requiring Nvidia to obtain licenses to export chips to China and other nations further limited the company's access. Meanwhile, China's National Development and Reform Commission has been drafting a plan to spend 2 trillion yuan ($295 billion) on AI data centers over five years, with a mandatory 80% domestic technology sourcing rule that effectively excludes Nvidia and AMD Advanced Micro Devices, Inc. ↘ 3.71%.aiweekly+1

State firms China Mobile and China Telecom are designated as primary operators of the infrastructure, with Huawei positioned as the leading chip supplier.aiweekly

Huawei's Ascend

Huawei has ramped production aggressively to fill the void. Bloomberg reported last year that the company planned to produce up to 1.6 million Ascend chip dies in 2026, including roughly 600,000 units of its flagship 910C processor — double the prior year's output. In May, Reuters reported that Huawei unveiled a new chip design principle aimed at improving performance without relying solely on shrinking transistors.bloomberg+1

China previously represented at least 20% of Nvidia's data center revenue. The loss of that market underscores how geopolitical tensions between Washington and Beijing are fracturing the global AI hardware supply chain into competing ecosystems.cnbc