Nvidia still sells more AI chips in China than anyone else. It just sells a lot fewer of them than it used to.
The company’s share of China’s data-center AI chip market dropped to 34% in the first half of 2026, according to an IDC report highlighted by Reuters on October 13. Huawei, meanwhile, climbed to 28%. A market Nvidia once treated as home turf is starting to look like a contested border.
The numbers behind the slide
Nvidia shipped 678,000 units into China during the first half of 2026. That figure represents a 44% drop from the same period a year earlier.
The research attributes much of that decline to US export controls on advanced AI chips. Washington has restricted which Nvidia products can legally reach Chinese buyers.
Huawei moved in the opposite direction. The Chinese tech giant delivered 572,000 units in the period, up from just over 300,000 units a year before. That growth pushed its market share to 28%, leaving it about six percentage points behind Nvidia.
Total shipments across China’s AI accelerator market reached 2.008 million units in the first half of 2026.
Huawei was not the only domestic player gaining. IDC tracks eleven Chinese vendors, and nine of them reported year-over-year growth in shipments. Alibaba’s chip unit T-Head held 7% of the market. Cambricon took 5%, Baidu’s Kunlunxin claimed 4%, and Hygon accounted for 3%.
GPUs lose the volume crown
For the first time, non-GPU accelerators outsold GPUs by volume in China. These include ASICs and NPUs, which are chips built to handle specific AI workloads rather than general-purpose parallel computing.
Non-GPU shipments jumped nearly 80% to 1.016 million units. GPU shipments went the other way, falling 26% to 991,000 units.
Background: export controls meet industrial policy
Two forces are pushing in the same direction here. The first is US policy. Export controls on advanced AI chips have limited what Nvidia can sell to Chinese customers, capping its ability to compete on its best products.
The second is Beijing’s own policy shift toward domestic AI chip production. China has made AI self-sufficiency a priority, and that push has supported local brands like Huawei.
What this means for Nvidia and the chip landscape
For Nvidia, the immediate concern is revenue from a large and strategically important region. A 44% drop in unit shipments is not a rounding error.
Still, perspective helps. Nvidia remains the single largest supplier in China’s data-center AI chip market at 34%. But the gap with Huawei is now narrow enough that the leaderboard could plausibly flip if current trends continue.
For Huawei and the broader Chinese chip sector, the report reads like a progress report on a national project. Nine of eleven tracked domestic vendors growing at once suggests the shift is not dependent on a single champion. Companies like Cambricon, Hygon, T-Head and Kunlunxin all stand to benefit from favorable government policy and a customer base with limited alternatives.
The key things to watch are straightforward. Does Nvidia’s share keep falling in the second half of 2026? Does Huawei close the remaining six-point gap? And do non-GPU accelerators extend their lead over GPUs, or was the first half a narrow crossover?
Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.