Nvidia loses China AI chip dominance to Huawei as export controls reshape global semiconductor race

Nvidia's AI chip sales in China stall, as local chipmakers like Huawei take the lead

HONG KONG (AP) -- In the race between the U.S. and China to develop artificial intelligence, the battle over hardware and computing power is heating up as Chinese companies like Huawei overtake global industry leaders like Nvidia in their home market. Jensen Huang, the CEO of computer chip giant Nvidia, was mobbed by onlookers as he hit the streets for the "zhajiangmian" noodles while visiting Beijing during U.S. President Donald Trump's May summit with Chinese leader Xi Jinping. But his celebrity status has not translated into success in selling Nvidia's advanced chips in China. Controls imposed by Washington on exports of advanced technology due to national security concerns initially stalled sales of Nvidia's advanced H200 AI chips there. By the time Huang won a reprieve, with Trump agreeing to their sale, Beijing had switched to encouraging use of domestically designed chips made by local rivals led by Huawei. Huang has acknowledged that the U.S. has lost its edge in China's advanced AI chips market as Chinese competitors have become "giants." "Well, we were in China for 30 years, and before the export control banned Nvidia out of China we had about 95% market share, and so we were competing just fine," he said in a recent interview with The Associated Press. "We have to have, number one, make sure that we have national security and that we protect our nation, but we also simultaneously should go and compete and grow our technology industry and maximize our exports," he said. Among Chinese chipmakers, Huawei leads Since the U.S. in 2019 excluded Huawei, and later China in general, from buying some of the world's most powerful computer chips and chipmaking machinery, Chinese semiconductor makers have rushed to become self-sufficient, developing their own chips and knowhow. Santa Clara, California-based Nvidia and its main rival AMD, or Advanced Micro Devices, dominate in the U.S. AI chip sector and much of the global market, but Huawei has made big inroads in China as Chinese AI companies like DeepSeek drive a push for improved chip performance and cost-effectiveness. A report by Bernstein, a global equity research and brokerage firm, estimated that Nvidia had about a 40% market share in China's AI chips market in 2025, roughly matched by Huawei. Bernstein has predicted Nvidia's market share will shrink to around 8% this year, while Huawei's will likely grow to about 50%. Nvidia "has definitely lost significant ground to Huawei, which (now) leads domestically," said Antonia Hmaidi, with the Mercator Institute for China Studies who focuses on semiconductors. By some measures, Huawei's most advanced commercial AI chips, the Ascend 950 series, can be seen as roughly comparable to Nvidia's H200, considered in the industry to be among Nvidia's most powerful products, according to industry analysts. "China now believes in its own self-sufficiency and supply capabilities," said He Hui, director of semiconductor research at research and advisory firm Omdia. Last September, Huawei also said it was rolling out some of the world's most powerful AI computing clusters, combining the power of thousands of chips like its global rivals, despite having to rely on Chinese-made semiconductors due to the U.S. export controls. Asked at a recent event about how Huawei's chip technology compares its rivals', including in the United States, He Tingbo, head of Huawei's semiconductor business, said: "We have found pretty good solutions." "Who can walk faster? Huawei or other companies? I don't know the answer," she said. "I think only time will tell." Nvidia is still vital for Chinese AI The semiconductor supply chain is global and no single country can build an advanced AI chip on its own. Demand still exceeds available supply in China when it comes to AI chips, said Rui Ma, founder of Tech Buzz China. Several recent cases linked to smuggling Nvidia's AI chips into China to circumvent export controls show the appetite for its technology. Nvidia designs the world's most powerful AI chips. To make them, it relies on Dutch company ASML's extreme ultraviolet lithography, or EUV, machines, which rely on U.S, components and technologies. Taiwan chipmaking giant TSMC uses those machines to make a large share of Nvidia's top AI chips at its fabrication plants. China is barred from buying Nvidia's most powerful AI chips or ASML chipmaking EUV machines. Huawei's high-performance chips lag behind Nvidia's most advanced technologies in many areas. Cutting edge technologies in China such as training AI models like DeepSeek's still rely on Nvidia AI chips, analysts say. Chinese universities and other big tech companies also want chips like the H200, in part for research and development. Nvidia's global sales are still expanding as AI demand surges. The company expects around $91 billion of revenue in May-July, up from nearly $82 billion in the previous quarter, excluding any data center compute revenue from China. Nvidia's latest annual revenue was almost $216 billion, while Huawei's was $126 billion for a comparable period. Huawei is catching up DeepSeek, the fast-growing Chinese rival of OpenAI's ChatGPT or Anthropic's Claude, said that its latest V4 AI model rolled out in April was adapted for Huawei's advanced Ascend chips. Paul Triolo, a partner at DGA-Albright Stonebridge Group, said it is likely there is "significant effort going into collaboration between DeepSeek and Huawei" to train future DeepSeek models on domestic hardware. That shows how Chinese-made chips can potentially replace Nvidia ones, said Phelix Lee, an analyst at Morningstar. But he added that, "We don't expect an abrupt switch toward (Huawei's) Ascend." Nvidia engineered its H20 chips, stripping down their computing power, so they could be sold to China without violating U.S. restrictions. Up to last year, it was still selling H20 chips in China, although shipments were gradually declining, said Brady Wang, a Taipei-based semiconductor analyst with Counterpoint Research. Beijing's public stance on imports of H200 chips has been unclear and Nvidia has said it has not sold H200 chips in China. At Nvidia's recent shareholders meeting, Huang said it had "yet to generate any revenue, and we are uncertain whether any imports will be allowed into the country." Huawei also has global chip aspirations Already the world's biggest supplier of telecommunications network equipment, Huawei has been expanding in global markets and its chips are no exception. The company says it operates in 170 countries and regions with a mission of "bringing digital to every person, home and organization for a fully connected, intelligent world." While there may be demand in other countries for its chips, China's production capacity for advanced chips still falls short of demand at home. As China's advanced chip manufacturing capacity increases and pricing become more competitive, they could gain market share in regions like Southeast Asia among others, said Wang of Counterpoint. "China's strategy of pursuing technological self-sufficiency -- and eventually exporting its technologies -- is unlikely to change regardless of whether Nvidia can sell its chips in China," Wang said. ____ AP journalists Josh Boak in Sherman, Texas, and Kelvin Chan in London contributed to this report.

Nvidia's Huang calls black market data centers made of smuggled parts a 'dead end'

Nvidia CEO Jensen Huang told shareholders on Wednesday that if a commercial opportunity conflicts with U.S. national security, the company would prioritize American interests. "National security comes first," Huang said in a session shortly after the company's annual stockholder meeting concluded. He added that if a company wanted to smuggle Nvidia's chips or systems into countries with export restrictions -- such as China -- they would have challenges getting it working because Nvidia wouldn't provide support or repairs. "Advanced AI data centers are massive integrated systems that require trusted hardware, software, networking, and continuing support," Huang said. "Trying to cobble together data centers with some smuggled products is a dead end." Huang's remarks come as Washington regulators and the Trump administration are increasingly wary that exporting AI software and hardware to China and other nations is a threat to national security. Earlier this month, Anthropic, which uses Nvidia chips, shut down Fable 5 and Mythos 5 after the U.S. government ordered it to disable access to its most advanced models. Nvidia's chips have had export controls placed on them since 2022, which forced the company to produce China-specific chips for the region that complied with U.S. government benchmarks. But last year, the U.S. cleared the company's H200 chip -- the same model used by U.S. companies -- for export to the region.

Nvidia CEO Jensen Huang says smuggled data centres are a dead end and national security comes first

Nvidia CEO Jensen Huang told shareholders on Wednesday that if a commercial opportunity conflicts with US national security, the company would prioritise American interests. "National security comes first," Huang said in a session shortly after the company's annual stockholder meeting concluded. Huang addressed the chip smuggling problem directly, arguing that anyone trying to build AI data centres with diverted Nvidia hardware would fail. "Advanced AI data centres are massive integrated systems that require trusted hardware, software, networking, and continuing support," he said. He described the prospect of assembling data centres from smuggled products as a dead end. The message was pointed. If a company wanted to smuggle Nvidia chips or systems into countries with export restrictions, such as China, Huang said they would face challenges getting the hardware working because Nvidia would not provide support or repairs. Without that ongoing relationship, he argued, the systems cannot operate at the scale modern AI demands. The remarks arrive against a backdrop of escalating enforcement. Supermicro co-founder Wally Liaw was charged in March with conspiring to smuggle roughly two and a half billion dollars in Nvidia-equipped servers to China through a front company in Southeast Asia, using heat guns to swap serial numbers and staging dummy servers to fool auditors. Liaw has pleaded not guilty, and the case is set for trial in November. Taiwan followed with its first criminal prosecution of AI chip smuggling in May, raiding 12 locations and seeking detention orders for three people accused of using forged documents to route Nvidia servers to mainland China. The crackdown has driven grey-market prices for Nvidia's B300 servers in China to roughly one million dollars, nearly double the US list price. Huang's comments also come two weeks after the US government ordered Anthropic to shut down its most powerful AI models, Fable 5 and Mythos 5, citing national security concerns over a reported jailbreak. Anthropic, which uses Nvidia chips for training, called the action disproportionate. The episode underscored Washington's increasingly aggressive posture toward AI technology it considers sensitive. Nvidia's own relationship with China has been shrinking steadily under export controls that began in 2022. About nine percent of the company's fiscal 2026 revenue came from China including Hong Kong, down from 13 percent the prior year. The Trump administration cleared sales of Nvidia's H200 chip to approved Chinese firms last year, but Huang told shareholders the company has not generated any revenue from those licenses and does not know whether China will allow imports. On the business side, Huang declared that the question of AI return on investment "has been answered." He pointed to GitHub, where pull requests nearly tripled this year because of AI-generated code, as evidence that useful AI output translates directly into demand for more computing power. "Nvidia systems may not be the cheapest to purchase, but Nvidia generates the lowest cost tokens, the highest token throughput, and the most revenues," Huang said. The company generated over 96 billion dollars in free cash flow in fiscal 2026 on revenue of 216 billion dollars. Huang reiterated that Nvidia plans to return 50 percent of its free cash flow to investors through share repurchases and dividends over the next few years. The board approved an additional 80 billion dollars in buyback authorisation in May and raised the quarterly dividend from one cent to 25 cents per share. At the meeting, shareholders re-elected all 10 board members, approved the executive compensation plan in an advisory vote, and passed one outside proposal requiring that all shareholder votes win with a simple majority. The company ratified PricewaterhouseCoopers as its auditor for fiscal 2027. The "dead end" framing is strategic. Huang is simultaneously reassuring Washington that Nvidia takes export controls seriously and telling customers in restricted markets that buying smuggled hardware is a losing proposition. Whether that message reaches the brokers and intermediaries who have been routing billions of dollars of Nvidia servers through Southeast Asia is another question entirely.

Nvidia's AI Chip Sales in China Stall, as Local Chipmakers Like Huawei Take the Lead

HONG KONG (AP) -- In the race between the U.S. and China to develop artificial intelligence, the battle over hardware and computing power is heating up as Chinese companies like Huawei overtake global industry leaders like Nvidia in their home market. Jensen Huang, the CEO of computer chip giant Nvidia, was mobbed by onlookers as he hit the streets for the "zhajiangmian" noodles while visiting Beijing during U.S. President Donald Trump's May summit with Chinese leader Xi Jinping. But his celebrity status has not translated into success in selling Nvidia's advanced chips in China. Controls imposed by Washington on exports of advanced technology due to national security concerns initially stalled sales of Nvidia's advanced H200 AI chips there. By the time Huang won a reprieve, with Trump agreeing to their sale, Beijing had switched to encouraging use of domestically designed chips made by local rivals led by Huawei. Huang has acknowledged that the U.S. has lost its edge in China's advanced AI chips market as Chinese competitors have become "giants." "Well, we were in China for 30 years, and before the export control banned Nvidia out of China we had about 95% market share, and so we were competing just fine," he said in a recent interview with The Associated Press. "We have to have, number one, make sure that we have national security and that we protect our nation, but we also simultaneously should go and compete and grow our technology industry and maximize our exports," he said. Among Chinese chipmakers, Huawei leads Since the U.S. in 2019 excluded Huawei, and later China in general, from buying some of the world's most powerful computer chips and chipmaking machinery, Chinese semiconductor makers have rushed to become self-sufficient, developing their own chips and knowhow. Santa Clara, California-based Nvidia and its main rival AMD, or Advanced Micro Devices, dominate in the U.S. AI chip sector and much of the global market, but Huawei has made big inroads in China as Chinese AI companies like DeepSeek drive a push for improved chip performance and cost-effectiveness. A report by Bernstein, a global equity research and brokerage firm, estimated that Nvidia had about a 40% market share in China's AI chips market in 2025, roughly matched by Huawei. Bernstein has predicted Nvidia's market share will shrink to around 8% this year, while Huawei's will likely grow to about 50%. Nvidia "has definitely lost significant ground to Huawei, which (now) leads domestically," said Antonia Hmaidi, with the Mercator Institute for China Studies who focuses on semiconductors. By some measures, Huawei's most advanced commercial AI chips, the Ascend 950 series, can be seen as roughly comparable to Nvidia's H200, considered in the industry to be among Nvidia's most powerful products, according to industry analysts. "China now believes in its own self-sufficiency and supply capabilities," said He Hui, director of semiconductor research at research and advisory firm Omdia. Last September, Huawei also said it was rolling out some of the world's most powerful AI computing clusters, combining the power of thousands of chips like its global rivals, despite having to rely on Chinese-made semiconductors due to the U.S. export controls. Asked at a recent event about how Huawei's chip technology compares its rivals', including in the United States, He Tingbo, head of Huawei's semiconductor business, said: "We have found pretty good solutions." "Who can walk faster? Huawei or other companies? I don't know the answer," she said. "I think only time will tell." Nvidia is still vital for Chinese AI The semiconductor supply chain is global and no single country can build an advanced AI chip on its own. Demand still exceeds available supply in China when it comes to AI chips, said Rui Ma, founder of Tech Buzz China. Several recent cases linked to smuggling Nvidia's AI chips into China to circumvent export controls show the appetite for its technology. Nvidia designs the world's most powerful AI chips. To make them, it relies on Dutch company ASML's extreme ultraviolet lithography, or EUV, machines, which rely on U.S, components and technologies. Taiwan chipmaking giant TSMC uses those machines to make a large share of Nvidia's top AI chips at its fabrication plants. China is barred from buying Nvidia's most powerful AI chips or ASML chipmaking EUV machines. Huawei's high-performance chips lag behind Nvidia's most advanced technologies in many areas. Cutting edge technologies in China such as training AI models like DeepSeek's still rely on Nvidia AI chips, analysts say. Chinese universities and other big tech companies also want chips like the H200, in part for research and development. Nvidia's global sales are still expanding as AI demand surges. The company expects around $91 billion of revenue in May-July, up from nearly $82 billion in the previous quarter, excluding any data center compute revenue from China. Nvidia's latest annual revenue was almost $216 billion, while Huawei's was $126 billion for a comparable period. Huawei is catching up DeepSeek, the fast-growing Chinese rival of OpenAI's ChatGPT or Anthropic's Claude, said that its latest V4 AI model rolled out in April was adapted for Huawei's advanced Ascend chips. Paul Triolo, a partner at DGA-Albright Stonebridge Group, said it is likely there is "significant effort going into collaboration between DeepSeek and Huawei" to train future DeepSeek models on domestic hardware. That shows how Chinese-made chips can potentially replace Nvidia ones, said Phelix Lee, an analyst at Morningstar. But he added that, "We don't expect an abrupt switch toward (Huawei's) Ascend." Nvidia engineered its H20 chips, stripping down their computing power, so they could be sold to China without violating U.S. restrictions. Up to last year, it was still selling H20 chips in China, although shipments were gradually declining, said Brady Wang, a Taipei-based semiconductor analyst with Counterpoint Research. Beijing's public stance on imports of H200 chips has been unclear and Nvidia has said it has not sold H200 chips in China. At Nvidia's recent shareholders meeting, Huang said it had "yet to generate any revenue, and we are uncertain whether any imports will be allowed into the country." Huawei also has global chip aspirations Already the world's biggest supplier of telecommunications network equipment, Huawei has been expanding in global markets and its chips are no exception. The company says it operates in 170 countries and regions with a mission of "bringing digital to every person, home and organization for a fully connected, intelligent world." While there may be demand in other countries for its chips, China's production capacity for advanced chips still falls short of demand at home. As China's advanced chip manufacturing capacity increases and pricing become more competitive, they could gain market share in regions like Southeast Asia among others, said Wang of Counterpoint. "China's strategy of pursuing technological self-sufficiency -- and eventually exporting its technologies -- is unlikely to change regardless of whether Nvidia can sell its chips in China," Wang said. ____ AP journalists Josh Boak in Sherman, Texas, and Kelvin Chan in London contributed to this report.

nvidia: Nvidia's AI chip sales in China stall, as local chipmakers like Huawei take the lead

Jensen Huang, the CEO of computer chip giant Nvidia, was mobbed by onlookers as he hit the streets for the "zhajiangmian" noodles while visiting Beijing during U.S. President Donald Trump's May summit with Chinese leader Xi Jinping. But his celebrity status has not translated into success in selling Nvidia's advanced chips in China. In the race between the U.S. and China to develop artificial intelligence, the battle over hardware and computing power is heating up as Chinese companies like Huawei overtake global industry leaders like Nvidia in their home market. Jensen Huang, the CEO of computer chip giant Nvidia, was mobbed by onlookers as he hit the streets for the "zhajiangmian" noodles while visiting Beijing during U.S. President Donald Trump's May summit with Chinese leader Xi Jinping. But his celebrity status has not translated into success in selling Nvidia's advanced chips in China. Controls imposed by Washington on exports of advanced technology due to national security concerns initially stalled sales of Nvidia's advanced H200 AI chips there. By the time Huang won a reprieve, with Trump agreeing to their sale, Beijing had switched to encouraging use of domestically designed chips made by local rivals led by Huawei. Huang has acknowledged that the U.S. has lost its edge in China's advanced AI chips market as Chinese competitors have become "giants." "Well, we were in China for 30 years, and before the export control banned Nvidia out of China we had about 95% market share, and so we were competing just fine," he said in a recent interview with The Associated Press. "We have to have, number one, make sure that we have national security and that we protect our nation, but we also simultaneously should go and compete and grow our technology industry and maximize our exports," he said. Among Chinese chipmakers, Huawei leads Since the U.S. in 2019 excluded Huawei, and later China in general, from buying some of the world's most powerful computer chips and chipmaking machinery, Chinese semiconductor makers have rushed to become self-sufficient, developing their own chips and knowhow. Santa Clara, California-based Nvidia and its main rival AMD, or Advanced Micro Devices, dominate in the U.S. AI chip sector and much of the global market, but Huawei has made big inroads in China as Chinese AI companies like DeepSeek drive a push for improved chip performance and cost-effectiveness. A report by Bernstein, a global equity research and brokerage firm, estimated that Nvidia had about a 40% market share in China's AI chips market in 2025, roughly matched by Huawei. Bernstein has predicted Nvidia's market share will shrink to around 8% this year, while Huawei's will likely grow to about 50%. Nvidia "has definitely lost significant ground to Huawei, which (now) leads domestically," said Antonia Hmaidi, with the Mercator Institute for China Studies who focuses on semiconductors. By some measures, Huawei's most advanced commercial AI chips, the Ascend 950 series, can be seen as roughly comparable to Nvidia's H200, considered in the industry to be among Nvidia's most powerful products, according to industry analysts. "China now believes in its own self-sufficiency and supply capabilities," said He Hui, director of semiconductor research at research and advisory firm Omdia. Last September, Huawei also said it was rolling out some of the world's most powerful AI computing clusters, combining the power of thousands of chips like its global rivals, despite having to rely on Chinese-made semiconductors due to the U.S. export controls. Asked at a recent event about how Huawei's chip technology compares its rivals', including in the United States, He Tingbo, head of Huawei's semiconductor business, said: "We have found pretty good solutions." "Who can walk faster? Huawei or other companies? I don't know the answer," she said. "I think only time will tell." Nvidia is still vital for Chinese AI The semiconductor supply chain is global and no single country can build an advanced AI chip on its own. Demand still exceeds available supply in China when it comes to AI chips, said Rui Ma, founder of Tech Buzz China. Several recent cases linked to smuggling Nvidia's AI chips into China to circumvent export controls show the appetite for its technology. Nvidia designs the world's most powerful AI chips. To make them, it relies on Dutch company ASML's extreme ultraviolet lithography, or EUV, machines, which rely on U. S, components and technologies. Taiwan chipmaking giant TSMC uses those machines to make a large share of Nvidia's top AI chips at its fabrication plants. China is barred from buying Nvidia's most powerful AI chips or ASML chipmaking EUV machines. Huawei's high-performance chips lag behind Nvidia's most advanced technologies in many areas. Cutting edge technologies in China such as training AI models like DeepSeek's still rely on Nvidia AI chips, analysts say. Chinese universities and other big tech companies also want chips like the H200, in part for research and development. Nvidia's global sales are still expanding as AI demand surges. The company expects around $91 billion of revenue in May-July, up from nearly $82 billion in the previous quarter, excluding any data center compute revenue from China. Nvidia's latest annual revenue was almost $216 billion, while Huawei's was $126 billion for a comparable period. Huawei is catching up DeepSeek, the fast-growing Chinese rival of OpenAI's ChatGPT or Anthropic's Claude, said that its latest V4 AI model rolled out in April was adapted for Huawei's advanced Ascend chips. Paul Triolo, a partner at DGA-Albright Stonebridge Group, said it is likely there is "significant effort going into collaboration between DeepSeek and Huawei" to train future DeepSeek models on domestic hardware. That shows how Chinese-made chips can potentially replace Nvidia ones, said Phelix Lee, an analyst at Morningstar. But he added that, "We don't expect an abrupt switch toward (Huawei's) Ascend." Nvidia engineered its H20 chips, stripping down their computing power, so they could be sold to China without violating U.S. restrictions. Up to last year, it was still selling H20 chips in China, although shipments were gradually declining, said Brady Wang, a Taipei-based semiconductor analyst with Counterpoint Research. Beijing's public stance on imports of H200 chips has been unclear and Nvidia has said it has not sold H200 chips in China. At Nvidia's recent shareholders meeting, Huang said it had "yet to generate any revenue, and we are uncertain whether any imports will be allowed into the country." Huawei also has global chip aspirations Already the world's biggest supplier of telecommunications network equipment, Huawei has been expanding in global markets and its chips are no exception. The company says it operates in 170 countries and regions with a mission of "bringing digital to every person, home and organization for a fully connected, intelligent world." While there may be demand in other countries for its chips, China's production capacity for advanced chips still falls short of demand at home. As China's advanced chip manufacturing capacity increases and pricing become more competitive, they could gain market share in regions like Southeast Asia among others, said Wang of Counterpoint. "China's strategy of pursuing technological self-sufficiency - and eventually exporting its technologies - is unlikely to change regardless of whether Nvidia can sell its chips in China," Wang said.