Nvidia AI chip sales in China stall as Huawei gains ground

Nvidia's sales of advanced AI chips in China have declined after Washington imposed export controls and Beijing began favoring domestic alternatives. The shift has allowed Chinese chipmaker Huawei to increase its share of the market.

Export controls and market shift Controls imposed by Washington on exports of advanced technology due to national security concerns initially stalled sales of Nvidia's advanced H200 AI chips in China. By the time a reprieve was granted, Beijing had switched to encouraging use of domestically designed chips made by local rivals led by Huawei.

Nvidia's chief executive said the company once held about 95 percent of the China market before the export controls took effect. "Well, we were in China for 30 years, and before the export control banned Nvidia out of China we had about 95% market share, and so we were competing just fine," he said in a recent interview.

Huawei's rising position A report by Bernstein estimated that Nvidia held about 40 percent of China's AI chips market in 2025, roughly matched by Huawei. Bernstein has predicted Nvidia's share will shrink to around 8 percent this year while Huawei's share grows to about 50 percent.

Huawei has rolled out some of the world's most powerful AI computing clusters using Chinese-made semiconductors. The company says it operates in 170 countries and regions.

Continued demand and production limits Demand still exceeds available supply in China for AI chips. Several recent cases linked to smuggling Nvidia's AI chips into China show continued appetite for the technology. Nvidia designs the world's most powerful AI chips but relies on Dutch company ASML's extreme ultraviolet lithography machines and Taiwan chipmaker TSMC for production.