Chinese chip makers delivered 1.65 million AI GPUs as government policy mandates domestic chips, reducing Nvidia's market share below 60% in the country.

Chinese semiconductor firms have taken a significant share of the domestic market, claiming 41% of the local AI server market and delivering 1.65 million AI GPUs out of a total of 4 million units in 2025. While Nvidia still leads overall with a 55% market share, shipping an estimated 2.2 million cards, this represents a major contraction compared to the company's claimed 95% market share before sanctions.

Huawei has emerged as the dominant Chinese chipmaker, shipping around 812,000 AI chips, or nearly 20% of the market. The Shenzhen-based firm is continuing development of AI processors, having launched its Atlas 350 AI accelerator last week, which is claimed to have nearly three times the performance of Nvidia H20 chips. T-Head, which is owned by Alibaba, holds a distant third place with 256,000 units sold, while AMD sits just outside the top three with 160,000 units for a 4% share of the domestic AI chip market. Baidu's Kunlunxin AI chip subsidiary and Cambricon each delivered 116,000 cards.

U.S. export restrictions have significantly reshaped the market landscape. Though the U.S. initially banned Nvidia and AMD from selling their most advanced chips to China in 2023, Chinese tech firms continued to favor nerfed versions like the Nvidia H20 and AMD MI308. President Trump completely banned all AI GPU exports in April 2025, forcing Chinese companies to rely on domestic chip makers. Trump reversed the ban on the H20 and MI308 in July 2025, but Chinese companies were discouraged from ordering after Commerce Secretary Howard Lutnick's "addition" comments during an interview. In December 2025, Trump allowed Nvidia to ship the H200 to China, though it took several months before Chinese companies were allowed to order the chips, and only for specific institutions and applications.

Despite rapid advancement, Chinese chip makers still lag five to ten years in AI data center chips compared to Nvidia and AMD. Beijing faces a dilemma, wanting to support its domestic chip industry while keeping its AI tech companies competitive globally. The Chinese government's efforts to redirect demand towards domestic semiconductors mean that even with Nvidia's H200 shipments potentially resuming, the company would likely have a difficult time returning to pre-sanctions market share in 2026.