Nvidia's China Troubles Deepen as Rivalry Takes New Turn Moz Farooque ACCA Tue, October 13, 2026 at 12:29 PM EDT NVDA +0.23% BABA -0.37% 688256.SS +0.47% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Nvidia's (NASDAQ:NVDA) grip on China's AI chip market weakened sharply in the first half of 2026, with its market share falling to 34% as U.S. export restrictions limited supply and domestic rivals led by Huawei gained ground.
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According to IDC data cited by Reuters, Nvidia shipped 678,000 AI accelerators in China between January and June, down 44% year over year.
Huawei, meanwhile, shipped 572,000 accelerators, up from more than 300,000 a year earlier, giving it a 28% market share.
That leaves Nvidia still in the lead, but with a much narrower advantage.
Other Chinese chipmakers are also gaining traction. Alibaba's T-Head held 7% of the market, Cambricon had 5%, Baidu's Kunlunxin captured 4%, and Hygon accounted for 3%.
Nine of the 11 Chinese chipmakers tracked by IDC increased shipments year over year.
China's total AI accelerator shipments reached 2.008 million units in the first half, while GPU shipments declined 26% to 991,000 as supplies of chips approved for sale in mainland China remained constrained.
Washington has blocked China from accessing Nvidia's most advanced AI processors, while Beijing has increasingly promoted domestic alternatives and requires companies to seek approval before importing some Nvidia chips that comply with U.S. restrictions.
Nvidia CEO Jensen Huang has repeatedly criticized those policies, arguing they are effectively handing China's roughly $50 billion AI chip opportunity to local competitors such as Huawei.
I think the most important number here is not Nvidia's 34% share by itself.
It is the speed at which domestic alternatives are closing the gap.
Nvidia's shipments fell 44%, while Huawei's nearly doubled. That suggests export restrictions are doing more than temporarily reducing Nvidia sales. They are giving Chinese customers stronger incentives to build around local hardware ecosystems.
That could create a lasting competitive problem even if restrictions eventually ease.
For Nvidia investors, China remains important because losing share there reduces access to one of the world's largest AI infrastructure markets and potentially strengthens future global competitors.
The key things to watch are Huawei accelerator shipments, performance of Nvidia's China-compliant chips, export-control changes and adoption of domestic software ecosystems around Chinese processors.
If Huawei and other suppliers continue improving while Nvidia remains constrained, the market-share shift could become increasingly difficult to reverse.
