Chinese firms plan to shift 46% of AI chip budgets to domestic makers

Chinese companies plan to allocate 46% of their AI accelerator budgets to domestic chipmakers over the next 12 months, up from 30% today, according to a Bloomberg Intelligence survey published on Tuesday, marking a sharp acceleration in Beijing's drive to reduce reliance on American semiconductor technology.aiweekly+2

A Market in Transition

The survey, which polled executives across China's tech sector, frames the shift as a direct consequence of escalating U.S.-China tensions that have reshaped the AI infrastructure landscape. While Nvidia ↘ 4.27% products remain popular, the Santa Clara-based firm's market share is expected to shrink as its China-specific H20 chips — which Beijing has urged domestic firms not to use — become harder to source.em360tech+1

Huawei, Hygon Information Technology, and Cambricon Technologies are all gaining traction, with survey respondents reporting they are actively testing accelerators from these firms. Bloomberg Intelligence noted that China's localization drive is showing "tangible progress," positioning domestic suppliers to capture a growing share of demand.seekingalpha+1

Huawei's Ascend Chips Prove Competitive

The budget shift is underpinned by real-world results. Beijing-based Zhipu AI trained its 744-billion-parameter GLM-5 model entirely on Huawei's Ascend 910C chips without a single Nvidia GPU, and the model scored first on the Humanity's Last Exam benchmark in February 2026. Earlier, in January 2026, Zhipu trained its GLM-Image model on Huawei's Ascend Atlas 800T A2 servers, marking the first powerful open-source model developed on an entirely domestic stack, according to the South China Morning Post.swfte+1

Huawei's Ascend 910C delivers approximately 80% of Nvidia's H100 performance at FP16 precision. The company's roadmap includes the Ascend 950 and 960 chips targeting parity with Nvidia's Hopper and Blackwell architectures respectively.linkedin+2

Broader Policy Context

The spending shift comes as China prepares a roughly 2 trillion yuan ($295 billion) investment over five years to build data centers nationwide, with Beijing mandating that at least 80% of core technologies be supplied domestically, Bloomberg News reported in June. Meanwhile, U.S. export controls have tightened further, with the Commerce Department in late May closing a loophole that had allowed advanced chips to reach Chinese subsidiaries operating abroad.cnbc+3