China is building up domestic AI-chip capacity, and Chinese companies are putting more homegrown processors to work. That does not mean Nvidia has disappeared from their systems. Recent reporting points instead to a transition: export restrictions and supply concerns are pushing adoption of Chinese alternatives, while Nvidia hardware, software and supply-chain realities remain part of the picture.
Why China is pushing for chip self-sufficiency
The push is strategic as well as practical. U.S. export controls restrict China’s access to advanced chips and semiconductor-manufacturing equipment, making reliance on foreign suppliers risky. Huawei executive Eric Xu described the concern to Reuters: “We cannot accept a destiny where we cannot control our fate being determined by others in terms of willingness to sell chips to China or not.”
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Xu called full chip self-sufficiency “the way forward” for China’s government, industry and Huawei. That is an ambition, not proof that the country can already supply every chip, system or component its AI sector needs. Building a domestic alternative means more than designing a processor: companies also need manufacturing capacity, memory, complete systems, compatible software and developers able to use them.
Domestic adoption is growing, but supply is still a constraint
Huawei told Reuters in September 2026 that it had deployed more than 1,000 systems using Ascend 910C processors. It also said Ascend 950 systems had entered commercial use, more than 5,200 developers were active monthly on Ascend software, and more than 40 AI models had been trained directly on Huawei’s computing platform. These are company-reported figures, not independently audited totals.
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Adoption does not yet equal abundant supply. Huawei said demand for its AI chips exceeded the amount it could supply in China. That shortfall helps explain why companies can be deploying more domestic accelerators while still relying on Nvidia: firms may use Chinese chips where they can obtain them and where the software supports their workloads, without having enough domestic capacity to replace every existing system.
Huawei has also discussed future products. In September 2026, it said testing of Ascend 950DT had produced good results and that it was talking with Chinese AI developers about the chip. Statements about testing, discussions or a product roadmap should not be mistaken for broad commercial availability or production at scale.
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Why Nvidia remains in Chinese AI development
Recent examples show that the transition is not a clean break. Reuters reported in July 2026 that DeepSeek had used both Nvidia and Huawei hardware. The foundation model underpinning DeepSeek’s R1 was trained on Nvidia’s H800, while DeepSeek’s V4 model was adapted for Huawei Ascend. Reuters also reported Huawei’s statement that its processors were used in part of V4-Flash training.
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Those examples describe different models and parts of development; they do not establish that every stage ran on the same hardware or that one company’s chips can be substituted for another’s without changes. Adaptation matters because an accelerator is useful only if the software stack can run the model and the workloads a company needs. Reuters has noted Nvidia’s CUDA software advantage alongside Huawei’s efforts to expand Ascend’s developer and model base.
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The companies’ reported work on domestic chips also faces manufacturing and memory constraints. Reuters said access to advanced manufacturing and high-bandwidth memory were relevant challenges for DeepSeek’s reported chip effort. Even a successful design does not by itself establish that the chip can be manufactured in sufficient numbers or deployed as a complete, usable system.
What the market-share estimates do—and do not—show
Estimates reported by the Associated Press illustrate how quickly the balance may be shifting, but they are not an official census. Bernstein estimated that in 2025 Nvidia held about 40% of China’s AI-chip market, roughly matching Huawei. Bernstein then forecast Nvidia at around 8% and Huawei at around 50% in 2026. The latter figures are forecasts, not confirmed results for the year.
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Huawei’s Xu has argued that Ascend’s share should be larger than Nvidia’s, but Reuters noted Huawei did not provide supporting data for that assertion. It should therefore be treated as an executive’s view rather than a verified market-share figure. The available estimates also do not mean that all remaining demand has shifted to domestic chips or that companies have stopped using Nvidia.
A separate survey of 60 executives across Chinese software, finance, manufacturing and retail companies, reported by Fortune in 2026, described local substitution as progressing while Nvidia remained popular. The reported survey size and summary do not establish a specific adoption percentage.
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How to read the shift
- More domestic deployment: Huawei’s reported system, developer and model figures indicate activity around Ascend, but they are company statements.
- Continued mixed use: DeepSeek’s reported use of Nvidia and Huawei hardware shows that domestic adoption and Nvidia use can coexist.
- Supply still matters: Huawei said demand exceeded its available China supply, while manufacturing access and high-bandwidth memory remain constraints in reported chip-development efforts.
- Market figures are uncertain: The 2025 shares are analyst estimates; the 2026 shares are a forecast. Neither is an official tally.
China’s AI-chip strategy is therefore best understood as an effort to reduce exposure to foreign supply and expand domestic options under real capacity and software constraints. The evidence supports growing use of Chinese accelerators, not a completed replacement of Nvidia or an end to Chinese companies’ use of its chips.
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