Chinese AI developers purchased over 1 million Nvidia GeForce and RTX Pro graphics cards this year to address the shortage of specialized AI hardware caused by US export restrictions. These consumer-grade cards are being used for inference tasks, as they remain exempt from current trade limitations.
Local demand for AI accelerators in China is projected to exceed 5 million units this year and double to over 10 million in 2027. Domestic production has more than doubled, yet local suppliers cannot fully meet the needs of developers, forcing companies to rely on repurposed gaming hardware.
Huawei has emerged as a major player, capturing 28% of the Chinese AI accelerator market in the first half of the year with 572,000 units shipped. Other domestic firms, including Alibaba, Cambricon, and Baidu, are also scaling production, though they still face challenges in software migration.
Total capital expenditure on AI infrastructure in China is expected to reach $193 billion this year, with Alibaba, ByteDance, and Tencent accounting for $104 billion of that total. This represents a more than twofold increase in spending for these three companies compared to the previous year.
According to IDC, Nvidia's share of the Chinese data center AI accelerator market dropped to 34% in the first half of the year. During this period, non-GPU accelerators surpassed traditional graphics processors in market share, growing by nearly 80% as domestic alternatives continue to expand.
