BEIJING, China: Chinese chipmakers are rapidly gaining ground in the country's artificial intelligence hardware market, capturing a significant share and chipping away at Nvidia's long-held dominance.

Domestic GPU and AI chip firms accounted for nearly 41% of China's AI accelerator server market in 2025, according to data from an IDC report, highlighting a shift driven by government policy and supply constraints.

The gains come as Beijing pushes to reduce reliance on foreign technology, encouraging companies and state entities to adopt locally developed chips following successive rounds of U.S. export controls that have restricted access to Nvidia's most advanced products.

Total shipments of AI accelerator cards by Nvidia, AMD and Chinese chipmakers reached about 4 million units in China last year, the data showed.

Nvidia remained the market leader, shipping roughly 2.2 million cards and retaining a 55% share. However, that marks a notable decline from its previously dominant position in one of its most important overseas markets.

AMD held a smaller foothold, shipping around 160,000 cards for a 4% market share.

Chinese vendors collectively shipped about 1.65 million units, reflecting their growing ability to fill the gap left by tightening U.S. restrictions.

Huawei Technologies led the domestic pack, shipping approximately 812,000 AI chips, about half of all Chinese-branded shipments. Alibaba's chip design unit T-Head ranked second with about 265,000 cards, while Baidu's Kunlunxin and Cambricon each shipped roughly 116,000 units, tying for third place among local players.

Other contributors included Hygon, as well as GPU startups MetaX and Iluvatar CoreX, which accounted for 5%, 4% and 3% of Chinese vendor shipments, respectively.

The shift reflects broader policy support for domestic technology. In 2025, China's central government launched a new wave of spending on artificial intelligence infrastructure, with local governments accelerating the rollout of intelligent computing centers across provinces.

Many of these projects carried implicit directives to prioritise domestic suppliers, reinforcing the momentum behind Chinese chipmakers.

The data underscores how geopolitical tensions and supply chain restrictions are reshaping the competitive landscape, allowing local firms to expand their presence even as Nvidia maintains its lead.