Nvidia is losing ground in China’s artificial intelligence (AI) chip market as domestic technology companies expand their presence in the rapidly growing data-center sector. Although Nvidia remains the country’s leading supplier of AI accelerators, Huawei is closing the gap with a significant increase in shipments during the first half of 2026.
According to data from International Data Corporation (IDC), reviewed by Reuters, Nvidia held 34% of China’s data-center AI chip market between January and June 2026. The company shipped approximately 678,000 AI accelerators during the period, marking a 44% decline compared with the same period last year.
The figures highlight a notable shift in China’s AI hardware industry, where local manufacturers are gaining momentum and strengthening their position against established international suppliers.
Huawei Strengthens Its Position in China’s AI Chip Market
Huawei has emerged as Nvidia’s closest domestic competitor, supported by a substantial increase in AI accelerator shipments. The Chinese technology company shipped around 572,000 units in the first half of 2026, compared with slightly more than 300,000 units a year earlier.
This growth helped Huawei secure 28% of China’s data-center AI chip market, leaving it just six percentage points behind Nvidia. The narrowing difference signals increasing competition in a market that has become strategically important for artificial intelligence development and computing infrastructure.
Huawei’s performance also reflects China’s broader efforts to strengthen its domestic semiconductor industry. As demand for AI computing continues to rise, local manufacturers are working to provide hardware solutions that can support the country’s expanding data centers and AI applications.
Chinese Chipmakers Continue to Gain Market Share
Huawei was not the only Chinese company to record growth. IDC’s data showed that nine of the 11 Chinese chipmakers tracked by the research firm experienced year-over-year increases in shipments during the first half of 2026.
Alibaba’s semiconductor division, T-Head, accounted for 7% of the market, placing it among the leading domestic competitors. Cambricon followed with a 5% share, while Baidu’s Kunlunxin held 4% and Hygon accounted for 3%.
These figures demonstrate that China’s AI chip market is becoming increasingly competitive. While Nvidia continues to lead, several local companies are expanding their reach, creating a more diverse supplier landscape for data-center operators.
The growth of domestic chipmakers could also influence future investment decisions as Chinese technology companies seek reliable access to the computing resources required to train and operate advanced AI models.
What Nvidia’s Declining Market Share Means
Nvidia’s reduced market share in China highlights the challenges facing international chip suppliers in an increasingly competitive technology environment. Its 44% year-over-year decline in accelerator shipments contrasts sharply with Huawei’s expansion, suggesting that the balance between foreign and domestic suppliers is changing.
However, Nvidia remains the market leader based on the reported first-half figures. Its 34% share is still higher than Huawei’s 28%, meaning the Chinese company has not yet overtaken its US rival in this segment.
The six-percentage-point gap nevertheless indicates that competition is intensifying. Continued growth among domestic manufacturers could reshape the market further as demand for AI infrastructure expands.
For China, the rise of local chipmakers represents an important development in its ambition to strengthen technological self-reliance. For Nvidia, maintaining its position will depend on its ability to compete in a market where domestic alternatives are becoming increasingly significant.
China’s AI Chip Industry Faces a Changing Landscape
The latest IDC figures point to a major transition in China’s data-center AI chip market. Nvidia retains the leading position, but Huawei’s growing market share and the wider expansion of Chinese semiconductor companies indicate that competition is becoming more intense.
As AI adoption accelerates across industries, access to powerful and reliable computing hardware will remain essential. The performance of Nvidia, Huawei, Alibaba’s T-Head, Cambricon and other domestic suppliers will therefore be closely watched by businesses and investors tracking the global AI industry.
The first-half results offer a clear indication that China’s domestic AI chip sector is gaining ground. Whether Huawei can close the remaining gap with Nvidia will depend on future shipment growth, market demand and the ability of both companies to meet the needs of China’s expanding AI infrastructure.
