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Nvidia’s dominance in the Chinese data-centre AI chip market has declined significantly, with the company’s market share falling to 34% in the first half of 2026. This shift marks a substantial retreat for the American semiconductor giant, which saw its shipments drop by 44% during the period. The decline is largely the result of tightened US export controls that have restricted the sale of advanced chips to China, creating an opening for domestic competitors to gain ground.
Huawei has been the most prominent among these local rivals, capturing 28% of the market share. The Chinese technology leader shipped approximately 572,000 AI accelerators in the first half of the year, closing the gap with Nvidia as domestic enterprises increasingly opt for locally produced hardware. This surge in Huawei's performance underscores the growing capability of Chinese firms to provide alternatives to restricted Western technology amidst ongoing trade tensions.
The overall market for AI hardware in China presents a complex picture. Total shipments of AI accelerators rose to 2.008 million units, yet the market for graphics processing units (GPUs) specifically contracted by 26%. This divergence indicates a changing preference in the types of processors being deployed for artificial intelligence tasks. Despite the decline in GPU sales, the International Data Corporation (IDC) anticipates that total accelerator shipments in China will grow by 19% throughout the year.
As Nvidia navigates the challenges of trade restrictions, the landscape of China’s technology sector continues to evolve toward greater self-reliance. The competition between international suppliers and local manufacturers is expected to sharpen as Chinese firms invest more heavily in research and development to match the performance of high-end global standards. The ongoing growth in total shipments suggests that the demand for AI processing power in China remains high, even as the sources of that power shift toward domestic providers.