China's data‑center market for artificial‑intelligence accelerators saw a notable reallocation in the first half of 2026: Nvidia's share fell to 34%, while Huawei captured about 28%, according to Reuters reporting based on IDC data.
What changed?
- Nvidia shipped 678,000 AI accelerators into China between January and June 2026, a 44% decline compared with the same period a year earlier.
- Huawei sold more than 572,000 chips in the same period, up from over 300,000 in the year‑earlier half.
Drivers of the shift
Two main forces underlie the change: US export controls and Beijing's policy preference for domestic technology. Washington has restricted sales of the most advanced Nvidia chips to China, and Chinese firms often require approvals to import certain sanctioned products. Jensen Huang, chief executive officer of Nvidia, has criticized these restrictions repeatedly, warning that US policy risks ceding the roughly $50 billion AI‑chip market in China to Huawei.
Stronger domestic players
Beyond Huawei, several Chinese firms expanded their market presence. Alibaba's chip design unit T‑Head reached a 7% share, Cambricon 5%, Baidu's Kunlunxin business 4%, and Hygon 3%. Of the 11 Chinese chipmakers tracked by IDC, nine increased shipments year‑on‑year.
Market data and trends
- A total of 2.008 million AI accelerators were delivered in China in the first half of 2026.
- Sales of graphics processing units (GPUs), widely used for training AI models, fell 26% to 991,000 units.
- Shipments of non‑GPU accelerators—devices optimized for other tasks such as running pretrained models—rose by nearly 80% to 1.016 million units, surpassing GPUs in unit terms.
- IDC reports that Huawei, T‑Head, Kunlunxin and Cambricon together accounted for 95% of the non‑GPU segment.
These chips are increasingly used by government agencies, internet companies and telecommunications operators.
Outlook
Analysts expect China's overall AI‑accelerator market to expand by about 19% in 2026, while GPU shipments may decline by around 9%. The trend presents both a challenge for Nvidia and an opportunity for China to strengthen technological self‑reliance, as domestic vendors capture a growing share of the non‑GPU accelerator market.
Conclusion
Regulatory pressure and domestic industrial policy have accelerated change in China’s AI‑chip market: Nvidia's market share has declined significantly, while Huawei and other local companies have rapidly increased shipments, especially in non‑GPU accelerators.
