By Grace Kim

Nvidia's share of the China AI accelerator market has fallen as Huawei Technologies narrows the gap, Reuters reported this week.

The wire service said Huawei's Ascend-series processors have absorbed orders that previously went to Nvidia. The shift follows US export controls that restrict shipments of Nvidia's H100, A100, and H20 parts to Chinese customers.

Nvidia historically commanded near-total dominance of Chinese AI silicon demand. The company's GPUs powered the bulk of training clusters operated by Alibaba, Tencent, Baidu, and ByteDance. Those workloads now increasingly run on Huawei hardware.

The US Commerce Department tightened export rules in 2022 and again in 2023. The restrictions bar shipments of advanced AI accelerators to China without licenses. Nvidia responded with the H20, a cut-down variant of its H100, before that part faced new limits.

What does the report change?

The Reuters report frames the redistribution as a structural shift rather than a one-quarter anomaly. Chinese cloud operators cite supply continuity and regulatory clearance as primary procurement criteria. Both favor domestic suppliers.

Huawei has scaled Ascend production through its HiSilicon design unit and domestic foundry partner SMIC. Yields have improved at SMIC's mature nodes, though leading-edge performance still trails TSMC's output for Nvidia. Pricing for Huawei accelerators has reportedly fallen as volumes increased.

How far has Huawei closed the gap?

The wire service did not disclose specific percentages. Industry analysts estimate Nvidia's China AI chip share has dropped materially since 2022, with Huawei absorbing the largest share of diverted demand. The redistribution ranks as the most significant shift in the China AI hardware market since the controls took effect.

Nvidia retains advantages in software stack maturity. The CUDA framework carries years of developer mindshare that Huawei's CANN toolkit has yet to match. The gap matters less for greenfield deployments driven by state policy.

What has Nvidia said?

The company has not issued a public statement on the latest Reuters report. Chief executive Jensen Huang has previously acknowledged export curbs have constrained the addressable market in China. He has not commented on the most recent share data.

Nvidia's data center revenue from China has declined across consecutive quarters. Analysts attribute the drop to export licensing delays, product restrictions, and customer substitution toward domestic parts.

What comes next?

Three factors will determine the trajectory: the scope of any new US export rules, the pace of Huawei's manufacturing scale-up, and Chinese customer preferences for fully domestic supply chains.

Beijing's industrial policy continues to favor local vendors. Provincial governments have directed state-owned enterprises toward domestic AI hardware for new data center builds. That mandate cuts directly against Nvidia's pipeline.

For Nvidia, the China market remains a source of high-margin revenue at a moment when the company scales toward trillion-dollar annual run rates. Losing further share to Huawei would compress that growth path.

The Reuters report signals a market in transition. The next twelve months will show whether Huawei's share gains consolidate or whether new Nvidia variants recover ground in Chinese data centers.