Nvidia shares are trading lower today as the market reacts to rising competition from Huawei, which is accelerating the rollout of its advanced artificial intelligence chips.
The latest drop in Nvidia’s stock price comes amid reports that Huawei is not only testing, but also preparing to mass-ship its new Ascend 910C and 910D AI processors to Chinese customers. These chips are being positioned as direct alternatives to Nvidia’s high-end H100 GPU, a mainstay for AI model training globally.
The timing of Huawei’s move is critical. Stringent US export restrictions have severely limited Nvidia’s ability to sell its most advanced AI chips, including the H100 and H20, to Chinese customers.
As a result, Chinese tech firms have been actively seeking domestic suppliers to fill the void left by Nvidia’s restricted presence. Huawei’s new chips, which offer performance comparable to Nvidia’s H100, provide these firms with a viable alternative and reduce their reliance on US technology.
Analysts have highlighted that even if US export rules were eased, Huawei’s chips would still present a significant competitive risk for Nvidia in China. The availability of a strong domestic option means Chinese customers now have a “second source” for high-performance AI hardware, which lowers the risk of supply disruptions and geopolitical tensions impacting their operations.
The broader context for Nvidia’s decline also includes investor worries about the future demand for AI chips. After two years of soaring valuations driven by AI chip sales, Nvidia’s momentum has slowed in 2025. Investors are now questioning whether demand for intensive AI computing will remain robust, especially as AI models become less reliant on the most powerful chips and as more competitors enter the market.
Adding to the pressure, the ongoing US-China trade war and new tariffs have further complicated Nvidia’s prospects in one of its largest markets. The combination of export bans, rising competition from Huawei, and evolving technology needs is fueling uncertainty about Nvidia’s growth trajectory.
In summary, Huawei’s advances in AI chip development and the shifting regulatory landscape are weighing heavily on Nvidia’s stock.
The rapid emergence of credible domestic alternatives in China is a clear signal that Nvidia’s dominance in the AI chip market is facing its most serious challenge yet. Investors will be closely watching how both companies navigate this new phase of global competition.