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Nvidia’s dominance in the Chinese data-centre AI chip market has weakened significantly, with its market share falling to 34% in the first half of 2026. According to a report by International Data Corporation (IDC), this decline represents a 44% drop in shipments for the US technology giant. The shift comes as domestic competitors, led by Huawei, capitalize on stringent US export restrictions that have hampered Nvidia’s ability to supply high-end hardware to one of its largest global markets.
Huawei has emerged as the primary beneficiary of Nvidia's supply challenges, closing the gap by capturing 28% of the market. During the first six months of 2026, Huawei shipped approximately 572,000 AI accelerators. This surge in domestic adoption highlights the growing capability of Chinese firms to provide viable alternatives to Western technology in the wake of geopolitical trade tensions. While Nvidia remains the market leader for now, its narrow six-percentage-point lead over Huawei marks a significant shift in the competitive landscape.
The broader AI hardware sector in China is currently undergoing a structural transition. Total shipments of AI accelerators in the country reached 2.008 million units in the first half of the year; however, traditional GPU shipments experienced a sharp decline of 26%. Despite the drop in GPU sales, IDC forecasts that the overall market for AI accelerators in China will grow by 19% by the end of the year. This indicates that while the origin of the chips is changing, the fundamental demand for computing power to drive artificial intelligence development remains robust.
The changing dynamics in China's AI chip market underscore the long-term impact of export controls on international trade and the global semiconductor supply chain. As US regulations continue to limit Nvidia’s reach, Chinese enterprises are increasingly turning to local solutions to power their data centres. The success of Huawei and other domestic rivals suggests an accelerating trend toward self-sufficiency in China’s high-tech infrastructure, posing a sustained challenge to the global dominance of US semiconductor firms.