Nvidia Faces a Dramatic Shift in the Chinese AI Accelerator Market

Nvidia’s share of the Chinese AI accelerator market could decline from 66% to just 8% in the coming years. This forecast by Bernstein, cited by Nikkei, attributes the change to domestic suppliers meeting approximately 80% of local demand. It is crucial to specify the share in context because Nvidia recently reported its market share in China fell to zero. Nvidia referred to quarterly deliveries dropping to zero due to an accelerated ban on exports, resulting in no product sales to China. The firm continues not to sell there presently. Bernstein’s analysis considers the overall market rather than a quarterly snapshot. Nvidia’s overall market share in China at the end of 2024 was 66%. Speculatively, it might now be higher, though the authors do not mention specifics.

The success of Chinese firms developing their AI chips hinges on these chip advancements and, naturally, on export restrictions. Currently, for instance, China bans the import of Nvidia’s H200 accelerators, although the U.S. recently approved their export. On another note, it is noteworthy that these Chinese companies are utilizing AI accelerators remotely through cloud services. They are negotiating access to Nvidia’s Rubin systems, which are yet to be released.