Nvidia's share of China's artificial intelligence chip market has fallen, and Huawei has moved closer to the US supplier's position, according to a Reuters report. The finding marks a measurable shift in one of the world's largest markets for AI accelerators, and it arrives after two years of US export controls that have reshaped what Nvidia is allowed to sell to Chinese customers.

The shift matters because China has been one of Nvidia's most important revenue pools for data center GPUs. Washington has repeatedly tightened the rules, first blocking Nvidia's top-tier parts, then restricting the redesigned, lower-performance versions the company built specifically to stay inside the legal limits. Each restriction narrowed the performance gap between what Nvidia could ship and what Huawei could offer from its domestic portfolio.

What does the report actually find?

Reuters reports that Nvidia's portion of the Chinese AI chip market has declined, while Huawei has closed the distance to the US firm. The report frames this as a trend rather than a single event: Chinese buyers are gradually moving workloads toward hardware they can buy without restriction.

The mechanism is straightforward.

• US export controls limit which Nvidia accelerators Chinese cloud providers and AI firms may purchase.
• Huawei, as a domestic supplier, faces no such limits on sales inside China and continues to push its own AI processor families into local data centers.
• Chinese customers, wary of future supply cuts, have a structural reason to qualify domestic parts even when the imported alternative performs better.

In plain terms: the policy environment, not raw product quality, is doing most of the work here.

Why Huawei can gain even with weaker silicon

Huawei's AI accelerators have generally trailed Nvidia's flagship GPUs in raw performance and in the maturity of the surrounding software stack. Nvidia's CUDA ecosystem remains the default for much of the world's AI development, and that advantage does not disappear overnight.

But China's market gives Huawei two durable edges. First, certainty of supply: a Chinese buyer that standardizes on Huawei hardware cannot be cut off by a US licensing decision. Second, state-backed procurement: large Chinese cloud and telecom groups have both incentive and instruction to build out domestic compute. Reuters' finding that the share gap is narrowing suggests those forces are now producing measurable purchasing changes, not just announcements.

For Nvidia, every point of share lost in China is revenue that the company cannot easily replace elsewhere, because Chinese demand for AI compute remains large even under restrictions.

What this means for the competitive picture

The Reuters report does not describe an outright collapse of Nvidia's China business; it describes erosion. Nvidia still sells approved accelerator models into the country, and its hardware remains the strongest option legally available to many Chinese buyers.

The risk for the US company is cumulative. Each new export rule pushes more Chinese volume toward domestic suppliers, and each domestic win gives Huawei more scale, more field experience, and more reason for customers to stay. Share lost this way tends to be hard to win back, even if restrictions later loosen.

For Huawei, the report confirms that its strategy of supplying China's AI build-out from within the country is gaining traction against the incumbent. The question is no longer whether Huawei can sell AI silicon at volume in China; it is how fast the gap closes from here.

The trend Reuters identifies points to a Chinese AI chip market that grows steadily less dependent on Nvidia with each procurement cycle.