Jack Paul 
Nvidia once held about 95% of China’s AI chip market. Today, that share is effectively zero. This isn’t a wild exaggeration. It’s the direct result of US export controls that have locked America’s most valuable chipmaker out of the world’s second-largest economy.
CEO Jensen Huang has acknowledged the collapse himself. He conceded that Nvidia has lost its entire Chinese AI accelerator business. The main beneficiary is Huawei, which is quickly becoming China’s primary supplier of advanced AI hardware.
How US export controls erased Nvidia’s China business
The unraveling started in October 2022. That’s when the US Commerce Department rolled out sweeping restrictions targeting advanced semiconductor sales to China. The initial rules barred Nvidia from shipping its flagship A100 and H100 GPUs to Chinese customers.
Nvidia tried to adapt. The company designed downgraded chip variants specifically to meet the new performance thresholds. But Washington tightened the rules again in October 2023. Those workaround products were effectively killed too.
It wasn’t just the US government squeezing Nvidia. Chinese authorities also instructed major tech companies to stop buying Nvidia’s AI chips entirely. Both governments were pushing Nvidia out of the market from opposite directions.
Huawei steps into the vacuum
With Nvidia sidelined, Huawei has emerged as the obvious replacement. The company has strong state support and an increasingly capable domestic chip ecosystem.
Major Chinese tech firms, from Baidu to Alibaba to Tencent, are turning to Huawei’s Ascend series processors for their AI training and inference workloads.
The policy paradox nobody wants to talk about
The stated goal of US export controls was to slow China’s AI development by restricting access to cutting-edge chips. But policy analysts are now raising uncomfortable questions. By cutting Nvidia off from the Chinese market entirely, the US may have accomplished something no Chinese industrial policy could have done on its own: it gave domestic chip companies a captive market worth billions of dollars in annual demand, with zero foreign competition.
Before the export bans, Chinese companies had little incentive to switch away from Nvidia. The CUDA software ecosystem was deeply entrenched, the hardware was best-in-class, and the switching costs were enormous. The export controls eliminated all of those barriers overnight. Companies that would have happily stayed on Nvidia’s platform for another decade were forced to invest in Huawei’s ecosystem instead.