Nvidia Loses China Market Share While Entering CPU Market

AI chip leader Nvidia is experiencing a significant decline in its Chinese market share as domestic competitors, primarily Huawei, gain dominance. Bernstein estimates Nvidia's share fell from roughly 95% in previous years to 40% in 2025 and may shrink further to 8% this year. Simultaneously, Huawei's market share is projected to grow to 50%, driven by the Ascend 950 series, which is now considered comparable in performance to Nvidia's H200 chips.

This shift follows U.S. export controls on advanced technology and a strategic push by the Chinese government to achieve technological self-sufficiency. While some cutting-edge training in China still relies on smuggled Nvidia technology, domestic firms like DeepSeek are increasingly adapting their models for Huawei hardware. CEO Jensen Huang acknowledged that the U.S. has lost its edge in the Chinese market, though Nvidia's global revenue continues to expand with projected quarterly revenues of $91 billion.

To diversify its hardware portfolio, Nvidia plans to launch its first stand-alone central processing unit (CPU) and a premium superchip combining a GPU and CPU this fall. The company targets the $200 billion CPU market with an expected $20 billion in stand-alone sales this year. This expansion directly challenges established leaders Intel and Advanced Micro Devices (AMD), as the rise of agentic AI increases the demand for CPUs to guide complex problem-solving tasks.