Huawei Surges Ahead as Nvidia Loses Ground in China AI Market
Chinese tech stocks are underperforming their AI peers, despite advancements in domestic chips and models. Huawei's Ascend chips have taken share from Nvidia in China, while DeepSeek has become OpenRouter's biggest model provider by token volume.
According to Bernstein, Nvidia's share of the China AI chip market is projected to collapse from 40% in 2025 to about 8% by the end of this year. Meanwhile, Huawei's Ascend line rises to near 50%, with its AI chip revenue expected to hit $12 billion this year, up 60% from $7.5 billion in 2025.
On the software side, Chinese open-weight models have gained traction, with DeepSeek leading usage charts and narrowing the performance gap with US frontier models to a record-low 6% in June. However, despite these developments, Wall Street remains skeptical of China's tech giants, treating them as if they need a 'cleaner earnings catalyst' before being valued like AI winners.