Nvidia loses China AI-chip share as Huawei closes the gap

Reuters reported that Nvidia’s share of China’s AI-chip market has declined as Huawei catches up. The report places Nvidia and Huawei in direct competition for demand in one of the world’s largest markets for artificial-intelligence processors.

The development comes as Nvidia’s latest annual company figures show $215.9 billion in revenue, up 65.5% year over year, with a 71.1% gross margin and a 55.6% net margin. Those figures describe the company overall rather than its China business, so the specific revenue effect of Huawei’s gains is not established here.

Nvidia is the company directly exposed through sales of AI chips in China. Huawei is the competing supplier identified in the report, and its progress could affect Nvidia’s access to Chinese customers and the product mix available in that market.

The report describes a change in market share rather than a quantified change in Nvidia’s total revenue or earnings. The pace of Huawei’s gains, the size of Nvidia’s remaining China business and any effect on pricing are open questions.

Nvidia’s next financial update will provide the next dated opportunity to assess whether China competition is appearing in reported results or company commentary.