The chip race is no longer just measured in labs, restrictions, and big announcements of new accelerators. In China, the battle is increasingly reflected in market figures. According to IDC data reviewed by Reuters, Nvidia closed 2025 with a 55% market share in China’s AI server accelerator market, far from the nearly absolute dominance it had before successive restrictions and China’s industrial policy push. Local manufacturers, for their part, now control around 41% of the market, with 1.65 million units delivered out of approximately 4 million cards sold in the country last year.
The figure is significant on its own, but even more so in what it symbolizes. For years, Nvidia was the almost unquestioned benchmark for AI computing in China. The company itself claimed its market share reached about 95% of China’s AI chip market in 2022, before Washington tightened export controls and Beijing doubled down on its technological substitution strategy. Today, the situation is very different: Nvidia remains the leader, yes, but no longer dominates alone or sets the pace to the same extent.
Among Chinese manufacturers, Huawei emerges as the big winner. Reuters, citing the IDC report, places Shenzhen-based Huawei with around 812,000 units shipped in 2025, accounting for nearly 20% of the total market and almost half of all domestically produced chips shipped. Behind it are T-Head, Alibaba’s chip division, with about 265,000 units, followed by Kunlunxin, linked to Baidu, and Cambricon, both with around 116,000 units. AMD, meanwhile, holds a modest position with about 160,000 units and a 4% market share.
The Combined Effect of Washington and Beijing
Nvidia’s loss in market share can’t be explained solely by improvements in Chinese chips. It also results from increasing political pressure from both sides. The US has been restricting China’s access to its most advanced GPUs since 2022, forcing Nvidia to redesign specific products for that market, with curtailed versions like the H20 and later attempts to make room for the H200 under very limited conditions. Reuters reported in December 2025 that Donald Trump would allow the shipment of H200 to approved clients in China, but months later, the agency noted that Nvidia had stopped manufacturing H200s destined for the Chinese market due to the lack of short-term sales prospects.
At the same time, Beijing has hardened its own self-sufficiency agenda. Reuters revealed in November 2025 that China had issued guidelines requiring new data centers receiving public funds to use only domestically produced AI chips. For projects less than 30% complete, authorities demanded removal of foreign chips already installed or cancellations of their purchase. This move directly impacts Nvidia, AMD, and Intel, serving as leverage to accelerate the adoption of domestic alternatives even in sectors where Nvidia’s software ecosystem remained a clear advantage.
The signal was not limited to regulation. In September 2025, Reuters reported on a large China Unicom data center in Qinghai, fully powered by domestically-made AI chips, mostly from T-Head. The $390 million project was presented as an example of the country’s strategic shift toward a less foreign-dependent AI infrastructure. Essentially, it was an early indication of what IDC data is now reflecting on a national scale.
Huawei as a Real Alternative
Within the Chinese ecosystem, Huawei is the player most clearly capitalizing on this transition. Reuters reported last week that its new 950PR chip has generated interest among giants like ByteDance and Alibaba, who plan to place orders. The agency also noted that Huawei expects to ship around 750,000 units this year, with mass production beginning in the second half of 2026. The significance of this move lies not just in volume but also in the fact that the new processor aims to overcome one of Nvidia’s traditional barriers: the difficulty of migrating software and workflows from CUDA to local platforms.
This does not mean China has already closed the technological gap with Nvidia or AMD. Most analyses still see Chinese providers as lagging in raw performance, energy efficiency, and ecosystem maturity. But the market doesn’t move solely based on benchmarks. Availability, regulatory compliance, real product access, and political pressure to build an indigenous value chain are also critical. When a country restricts the use of foreign chips in state-funded data centers and simultaneously promotes public procurement, financing, and deployment of local hardware, market share ceases to depend solely on the best silicon.
An increasingly unrecoverable market for Nvidia
The big question now is whether Nvidia can recover some ground in 2026. In the short term, it doesn’t seem easy. Although Washington opened a limited door to the H200 and some Chinese institutions remain interested in US hardware, Reuters reported in March that Nvidia did not expect significant sales of the H200 in China in the near future. Moreover, regulations and Beijing’s directives are specifically designed to prevent the return of foreign chips from hindering the rise of domestic providers.
Therefore, the current 55% share may still look high but can also be interpreted as the beginning of a new phase. Nvidia is still the leader, but it no longer rules with the certainty it once had. Meanwhile, China has shown that its substitution strategy is not just political rhetoric: it is starting to translate into actual shipments, market share, and concrete infrastructure projects. The AI battle in China is not over, but it is no longer fought solely with US GPUs.
Frequently Asked Questions
What is Nvidia’s current market share in China’s AI chip market for servers?
According to IDC data reviewed by Reuters, Nvidia closed 2025 with a 55% share in China’s AI server accelerator market, compared to 41% held by Chinese manufacturers and 4% by AMD.
Which Chinese company currently leads this local market?
Huawei is the main Chinese player, with approximately 812,000 units shipped in 2025, ahead of T-Head, Kunlunxin, and Cambricon.
Why is Nvidia’s market share falling in China?
Primarily due to US export controls on advanced chips and China’s policy to foster data centers and AI projects using domestically produced semiconductors, especially in state-supported facilities.
Can Nvidia regain its former position in China?
In the short term, it seems unlikely. Although there was limited opening to the H200, Reuters reported that Nvidia does not expect significant sales soon, as Beijing continues to push substitution with domestic chips.
via: tomshardware