Nvidia Corp. (NASDAQ:NVDA) is losing ground in China’s AI chip market, as export restrictions and Beijing’s push for domestic technology strengthen Huawei Technologies’ position.
An IDC report found Nvidia held 34% of China’s AI accelerator market during the first half of 2026, while Huawei’s share reached 28%, narrowing the gap after Nvidia shipped 678,000 accelerators between January and June, Reuters reported. That total represented a 44% decline for Nvidia chips from the same period last year, according to the report.
IDC did not clarify which Nvidia chips accounted for its 34% market share or whether the figure included restricted B200 and B300 chips, which have reportedly been smuggled into China.
Huawei shipped 572,000 accelerators, up from more than 300,000 a year earlier. Alibaba Group Holding Ltd. (NYSE:BABA) unit T-Head captured 7%, while Cambricon Technologies Corp. held 5%, the report added.
China’s total accelerator shipments climbed to 2.008 million units. GPU shipments declined 26% to 991,000, while other accelerator shipments increased nearly 80% to 1.016 million.
Nvidia did not immediately respond to Benzinga’s request for comments.
Huawei Expands Chip And Software Challenge to Nvidia
U.S. restrictions on advanced AI chip exports have limited Nvidia’s available products in China. Beijing has also encouraged domestic alternatives and introduced approval requirements for Nvidia imports that comply with Washington’s rules.
The market shift follows a broader expansion by Huawei. In September, the company introduced more than 10 chipsets spanning AI accelerators, processors and connectivity components, targeting infrastructure dominated by Nvidia, Advanced Micro Devices Inc. (NASDAQ:AMD) and Intel Corp. (NASDAQ:INTC).
That hardware push is being reinforced by software development. Later that month, DeepSeek partnered with Huawei on open-source software for Ascend chips, challenging Nvidia’s CUDA platform, which has helped maintain developer reliance on its processors.
Nvidia CEO Jensen Huang said in May that Huawei was "very, very strong" and acknowledged Nvidia had "largely conceded" the China market as export controls accelerated the domestic chip ecosystem. “I don’t have any expectation,” Huang said.
Shares of Nvidia dipped about 0.90% to $224.29 premarket on Tuesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
To add Benzinga News as your preferred source on Google, click here.
