Nvidia is losing AI-accelerator market share in China, and Huawei is the company gaining ground fastest, according to a Reuters report. That's the headline finding, and for anyone tracking the semiconductor supply chain, it marks a measurable shift in one of the world's largest AI hardware markets.

The report, published by Reuters, frames the development as a closing gap rather than a wholesale reversal. Nvidia still sells AI chips (processors designed to train and run artificial-intelligence models) into China. Huawei, its chief domestic rival, is now winning enough business to shrink Nvidia's slice of the market.

What does this change for buyers and suppliers? For Chinese cloud operators and AI developers, it means a credible domestic alternative is absorbing orders that once went to Nvidia by default. For Nvidia, it means its China revenue base — already constrained by US export controls — faces competitive pressure on top of regulatory pressure.

Why is Nvidia's position weakening?

Two forces are working on Nvidia at once. The first is policy: Washington's export controls restrict which of Nvidia's AI chips can legally ship to China, capping the performance tier the company can offer. The second is competitive: Huawei has been pushing its own accelerator lineup into exactly that opening.

The Reuters report does not break out exact share figures, but its central claim is directional and consistent — Nvidia's share is falling, and Huawei's is rising. A gap that once looked unbridgeable is, in Reuters' assessment, closing.

What is Huawei actually selling?

Huawei's push rests on domestic AI chips it has developed amid US sanctions on the company itself. Those sanctions cut Huawei off from advanced US manufacturing technology starting in 2019 and 2020, forcing the firm to build an ecosystem around its own silicon and supply chains.

Reuters characterizes the result as real commercial traction — not just state-backed procurement optics. Chinese firms buying Huawei accelerators gain a procurement route that no export license can block.

What does this change for Nvidia?

Nvidia still holds the global lead in AI accelerators, and its training chips remain the reference hardware for large model development in most of the world. But China was long one of its significant markets, and the report underlines that this position is eroding on two fronts at once.

The practical read for the industry:

• Export controls limit what Nvidia can sell into China, throttling its addressable product range there.
• Huawei is converting that constraint into orders, shrinking Nvidia's relative share.
• Chinese buyers gain a sanction-proof domestic option, which reduces the urgency of waiting for US-approved Nvidia parts.

None of this, per the report, amounts to Nvidia exiting China. It amounts to a market that used to be near-captive becoming contested.

How firm is the trend?

Reuters attributes the finding to a report it reviewed — hence the "report finds" framing — and presents the share shift as measured, not speculative. The trend line matters more than any single quarter: each order Huawei wins deepens its software ecosystem and reference base, the same flywheel effect that made Nvidia's CUDA (its proprietary parallel-computing platform) a lock-in for developers globally.

For now, the gap is closing, not closed. But the direction of travel is the story.