China did not go without AI chips in the first half of 2026. Chinese companies supplied more of them, and Nvidia, which US export rules kept from selling its best products there, shipped 44% fewer. According to an IDC report seen by Reuters, Nvidia's share of China's market for data-centre AI chips fell to 34%, and Huawei, with 28%, is now six percentage points behind it.
Nvidia is still the largest single supplier in China. What changed is how fast the gap closed, and what kind of chip fills it.
Nvidia shipped fewer chips, Huawei shipped nearly twice as many
IDC counted the AI chips sold into China between January and June 2026. Total shipments reached 2.008 million. Nvidia's part of that was 678,000 chips, down 44% from a year earlier.
Huawei shipped 572,000, up from more than 300,000 a year earlier. That is 28% of the market. Behind Huawei, Alibaba's chip-design unit T-Head held 7%, Cambricon 5%, Baidu's chip unit Kunlunxin 4% and Hygon 3%. IDC tracks 11 Chinese chipmakers, and nine of them increased their shipments from a year earlier.
This is wider than one company overtaking another. Chinese suppliers, led by Huawei, supplied the volume Nvidia's restricted products could not.
The mix of chips changed
The report also splits the market by type of chip. GPUs, the processors most widely used to train AI models, fell 26% to 991,000 units. Other AI chips, which are built for AI work but are not GPUs, rose nearly 80% to 1.016 million units. They outsold GPUs for the first time.
Those other chips are concentrated among Chinese makers. Huawei, T-Head, Kunlunxin and Cambricon together accounted for 95% of that segment, according to the Economic Times's account of the report, which also says government agencies, internet companies and telecoms providers are adopting them.
IDC expects total AI chip shipments in China to grow 19% in 2026 even as GPU shipments fall 9%. Demand is not shrinking in IDC's forecast. It is moving toward chips that are not GPUs.
Two governments pushed the same way
Reuters attributes the decline chiefly to US export controls, which restricted what Nvidia could sell in China and limited China's access to its most powerful AI chips. Beijing pushed from the other side: it promoted domestic alternatives and required Chinese companies to get approval before importing the Nvidia chips that still meet US rules.
Nvidia chief executive Jensen Huang has repeatedly criticised the curbs, saying they forced a US company to cede China's $50 billion AI chip market to Huawei. That is his argument. The IDC figures show Nvidia's shipments falling and Huawei's rising, but they cannot show that the export rules were the only cause.
Limits of the figures
The IDC report is not public. The figures come from Reuters' reading of it, so IDC's definition of the market and its method cannot be checked from outside. How much of Nvidia's decline came from export rules, and how much from other factors such as customer choices, is not something the figures separate.
The figures also count chips, not computing power or revenue. A Huawei chip and an Nvidia chip can each count as one unit while differing a lot in what they can do. Nothing in the report shows that Huawei's chips match Nvidia's.
Nvidia still leads by six points, 34% against 28%, but its shipments fell 44% while its closest rival's nearly doubled. IDC expects the shift to continue through 2026, with GPU shipments down 9% and total shipments up 19%.