For years, Nvidia's grip on China's data center AI chip market looked unshakeable. New figures from research firm IDC, reported by Reuters on October 13, show how quickly that position is eroding. Nvidia's share of the market fell to 34% in the first half of 2026, while Huawei climbed to 28% — close enough that the race for China's AI hardware business now looks genuinely competitive.
The shipment numbers tell the story. Nvidia shipped about 678,000 AI accelerators in China between January and June, a drop of roughly 44% from a year earlier. Huawei shipped 572,000 units, up from more than 300,000 in the same period last year. Across the whole market, total AI accelerator shipments reached about 2.008 million units in the first half, even as shipments of GPUs — the chips most widely used to train AI models — fell 26% to 991,000 units as supplies eligible for sale in mainland China stayed limited.
Huawei is not the only local challenger gaining ground. Alibaba's chip design unit T-Head held 7% of the market, followed by Cambricon at 5%, Baidu's Kunlunxin at 4%, and Hygon at 3%. Nine of the 11 Chinese chipmakers IDC tracks increased their shipments from a year earlier, a sign that the shift is broad-based rather than a single company's surge.
Two policy forces are driving the change. Washington has restricted China's access to Nvidia's most powerful AI chips, narrowing what the American company can legally sell in the world's second-largest economy. Beijing, meanwhile, has promoted domestic alternatives and requires Chinese companies to seek approval before importing Nvidia chips that comply with the export rules. Nvidia CEO Jensen Huang has repeatedly criticized the export curbs, arguing that the policy is handing China's AI chip market — one he has valued at around 50 billion dollars — to Huawei.
The IDC figures come with caveats. The firm did not specify which Nvidia products made up the 34% share, or whether the count included cutting-edge chips such as the B200 and B300, which are barred from export to China but have been smuggled into the country. Nvidia did not respond to a request for comment on the report.
Even with those unknowns, the direction is hard to miss. Export controls were meant to slow China's AI progress by limiting access to top-end American silicon. Instead, they are accelerating the build-out of a domestic chip ecosystem that grows stronger with every order Nvidia cannot fill. For the rest of the industry — cloud providers, model builders, and investors — the takeaway is that the global AI hardware market is splitting into two supply chains, and planning for just one of them is getting riskier by the quarter.