According to an IDC report seen by Reuters, Nvidia's share of China's data-centre artificial intelligence chip market fell to 34% in the first half of 2026, down from a year earlier. The decline was attributed to US export restrictions that curbed supplies and domestic rivals expanding their presence. Nvidia shipped 678,000 AI accelerators in China between January and June, representing a 44% decrease from the previous year. As reported by Reuters, the company's CEO Jensen Huang has repeatedly criticised Washington's export restrictions, arguing that the policies have forced the US chipmaker to surrender opportunities in China's $50 billion AI chip market to competitors. IDC did not specify which Nvidia products made up its 34% market share, or whether the figure included cutting-edge chips such as the B200 and B300, which are barred from export to China but have been smuggled into the country.
Chinese competitors significantly expanded their market presence during the same period. Huawei emerged as the primary beneficiary, with Alibaba's chip-design unit T-Head accounting for 7% of the market, followed by Cambricon with 5%, Baidu's Kunlunxin with 4%, and Hygon with 3%. According to IDC data reported by Reuters, nine of the 11 Chinese chipmakers tracked increased shipments from a year earlier, underscoring the momentum behind Beijing's push to develop a domestic semiconductor industry amid restrictions on access to advanced US technology. Huawei held the largest share of the AI market among Chinese developers, at 28%, as reported by Reuters. Huawei shipped 572,000 AI accelerators, up from more than 300,000 a year earlier, giving it a 28% share of the overall market.
A significant technological shift occurred in China's AI computing landscape during the first half of 2026. As reported by Reuters, shipments of graphics processing units (GPUs) fell 26% to 991,000 units as supplies of products permitted for sale in mainland China remained limited. However, shipments of other AI accelerators rose nearly 80% to 1.016 million units, surpassing GPUs by volume for the first time. These processors include chips designed for specific AI workloads, such as running already-trained models, with Huawei, T-Head, Kunlunxin and Cambricon together accounting for 95% of the non-GPU segment. Total AI-accelerator shipments reached 2.008 million units in the first half, according to IDC data. According to IDC, competition is shifting from the performance of a single chip to system-level capabilities, including how well chips work in a larger computing cluster.
The shift reflects changing priorities in China's AI computing industry, where competition is increasingly centred on system-level capabilities rather than individual processor performance. According to IDC, as reported by Reuters, the contrasting outlook points to a market increasingly shaped by domestic chipmakers and alternative processor architectures as export restrictions constrain Nvidia's access to China. While Nvidia remains a major supplier, the rapid growth of non-GPU accelerators suggests that Chinese technology companies are increasingly turning to local suppliers to meet rising demand for AI computing capacity. The decline also comes amid more efforts by Chinese AI chip major Huawei to produce competing AI chips, while other local majors continue producing more advanced chips. Beijing has promoted domestic alternatives and required Chinese companies to seek approval to import compliant Nvidia chips, further limiting the US company's market access. IDC expects total accelerator shipments in China to grow 19% this year, even as GPU shipments fall 9%.
