Chinese firms leave Nvidia for local AI suppliers, survey shows
Tencent, Alibaba and Huawei Technologies are among the players best-positioned to take advantage of the shift
Published Tue, Jul 7, 2026 · 11:46 AM
[SINGAPORE] Chinese companies are ditching Nvidia’s advanced accelerators in favour of domestic silicon, underscoring how tensions with the US are reshaping the artificial intelligence infrastructure buildout and propelling Beijing’s ambitions to substitute American technology.
Executives in the country say they will allocate 46 per cent of their budget for AI accelerators to domestic products over the next 12 months.
This is up from 30 per cent today, according to a Bloomberg Intelligence survey released on Tuesday (Jul 7).
In addition, 80 per cent of executives said their total infrastructure spending is running over-budget this year, mostly because of the high cost of AI-related projects.
China’s biggest AI infrastructure builders and their key suppliers – Tencent, Alibaba and Huawei Technologies – are best-positioned to take advantage of the shift.
AI accelerators produced by Hygon Information Technology and Cambricon Technologies were also being evaluated by a large pool of respondents to the survey.
“China’s drive to substitute locally-made AI semiconductors for foreign ones is making progress, which is likely to benefit domestic makers such as Huawei and Hygon,” said the report, which surveyed 60 executives at Chinese software, finance, manufacturing and retail companies.
While Nvidia’s products remain popular, the Santa Clara-based firm’s market share is expected to shrink as its H20 chips, which Beijing has urged its tech firms not to use, become harder to find and local firms take over, according to the survey.
China is allocating roughly 2 trillion yuan (US$294 billion) to build data centres across the country in the next five years, a government-led initiative to expand the use of AI in sectors from healthcare to city management.
At least 80 per cent of core technologies, such as chips, will be supplied by domestic companies, Bloomberg News reported.
But a global memory chip shortage is likely to cap the growth of Chinese AI firms like Semiconductor Manufacturing International Corporation, with ChangXin Memory Technologies poised to reap the benefits.
The bottlenecks are shifting from sheer computing power to securing supply of high-bandwidth memory chips that support rapid data transfer, according to the report. BLOOMBERG
