[DigitalToday Lee Yun-seo] Nvidia's share of China's data centre artificial intelligence (AI) chip market fell to 34 percent.

Cryptopolitan, a blockchain media outlet, reported on Monday that U.S. semiconductor export restrictions to China sharply reduced Nvidia shipments. It said Huawei quickly raised its share, narrowing the gap between the two to 6 percentage points.

Nvidia shipped 678,000 AI accelerators in China in January-June 2026. That was down 44 percent from the same period in 2025. Huawei increased shipments over the same period to 572,000 from about 300,000, raising its share to 28 percent.

Chinese companies also made notable gains. Alibaba's chip design unit T-Head posted a 7 percent share, followed by Cambricon with 5 percent, Baidu's Kunlunxin with 4 percent and Hygon with 3 percent. Nine of 11 Chinese chip companies surveyed by IDC increased shipments over the past year.

U.S. export restrictions were cited as a reason for Nvidia's slump. The restrictions prevent Nvidia from selling its most advanced AI chips to China, and the Chinese government has moved to encourage the use of domestically made chips. China is also requiring separate approvals for Chinese companies seeking to import Nvidia processors that comply with U.S. export rules. Chinese customers are also shunning the limited Nvidia product lineup that the United States allows to be sold.

The market structure is also changing. Total shipments of AI accelerators in China in the first half of 2026 were about 2,008,000 units. GPU shipments fell 26 percent to 991,000, but shipments of non-GPU accelerators designed for specific AI tasks such as inference jumped about 80 percent to around 1,016,000 units.

Chinese companies are leading the non-GPU segment. Huawei, T-Head, Kunlunxin and Cambricon accounted for 95 percent of that market, IDC said. Their major customers were government agencies, internet companies and large telecommunications operators.

The annual outlook suggests the same trend may continue. IDC forecast China's annual GPU shipments would fall 9 percent this year. It expected total AI accelerator shipments to rise 19 percent as demand for non-GPU chips increases.

The basis of competition is also changing. IDC said competition is shifting away from individual chip performance toward how efficiently large interconnected chip clusters are operated like a single system. Nvidia's weakened position in China's AI infrastructure market reflects not only export restrictions but also changes in demand patterns and how technology is adopted.