Nvidia is still the largest supplier of data-center AI chips in China, but its lead is narrowing quickly as domestic chipmakers gain ground.
According to IDC data reviewed by Reuters, Nvidia’s share of China’s data-center AI chip market fell to 34% in the first half of 2026.
The company shipped around 678,000 AI accelerators between January and June, down 44% year over year.
Huawei Closes the Gap
Huawei emerged as Nvidia’s strongest local competitor during the period. The Chinese company shipped around 572,000 AI accelerators, up from just over 300,000 a year earlier.
That gave Huawei a 28% market share, putting it only six percentage points behind Nvidia. Nine of the 11 Chinese chipmakers tracked by IDC recorded year-over-year shipment growth.
Alibaba’s T-Head accounted for 7% of the market, followed by Cambricon at 5%, Baidu’s Kunlunxin at 4%, and Hygon at 3%.
US Restrictions Reshaping the Market
The shift comes as US export restrictions continue to limit Nvidia’s ability to sell some of its most advanced chips in China.
Chinese companies also face approval requirements when importing certain Nvidia processors that comply with existing restrictions.
At the same time, Beijing has been encouraging local companies to adopt domestically produced chips as part of its broader push for technological self-reliance.
These policies have created more room for companies such as Huawei, Cambricon and other Chinese chipmakers to expand.
Nvidia CEO Warns About Losing China
Nvidia CEO Jensen Huang has repeatedly criticized US export restrictions on advanced AI chips.
He has argued that the restrictions are giving competitors, particularly Huawei, a larger share of China’s AI chip market, which he has estimated to be worth roughly $50 billion.
Nvidia had not commented on the latest IDC figures at the time of reporting.
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