Nvidia is losing share in China's AI chip market, and Huawei is the company gaining most from that decline, according to a new report covered by The Standard (HK).

The headline finding is simple. Nvidia, which has dominated AI accelerators in China for years, no longer holds its position unchallenged. Huawei, its closest domestic rival, has narrowed the gap. The report does not frame this as a collapse. It frames it as erosion. And erosion in this market matters more than almost anywhere else.

China is one of the largest AI hardware markets on earth. Even a few percentage points of share shift there translates into billions of dollars in revenue over a product cycle.

Why is Nvidia's position weakening?

The mechanism behind the shift is policy, not product. Washington has restricted Nvidia's exports of its highest-end AI processors to China since 2022. Each round of rules has forced the company to sell cut-down variants designed to stay inside the permitted performance envelope.

Those downgraded chips are legal to sell. They are also less attractive to Chinese buyers than they once were, because domestic alternatives have improved.

Huawei sits on the other side of the same policy fence. Its Ascend line of AI processors cannot match Nvidia's flagship parts on raw performance or software maturity. But it is available without export restrictions, it improves with each generation, and it is backed by a state push for self-sufficiency in computing hardware.

What does this change for buyers and suppliers?

The practical question for Chinese AI developers is straightforward: does a domestic chip now do the job? For some workloads, the answer increasingly appears to be yes. That is what a shrinking Nvidia share implies, even without exact figures attached to it in the published coverage.

For Nvidia, the change is significant but survivable. China revenue has already been squeezed by export controls, and the company's overall business now rests heavily on demand from US cloud providers building out AI infrastructure.

For Huawei, the gain validates a strategy that has cost it years of effort and billions in investment under US sanctions.

What the report signals

One report does not settle a market. Share estimates in restricted export categories are notoriously hard to verify, and both companies guard shipment data closely.

But direction matters. Every point of share Huawei takes makes Chinese AI infrastructure less dependent on a single US supplier. That is precisely the outcome Washington's restrictions did not intend, and it is the one Beijing has worked toward for a decade.

The Standard's report adds to a growing body of evidence that the gap between Nvidia and its Chinese challenger is closing, not widening.