As Chinese companies rapidly shift from Nvidia to domestic artificial intelligence (AI) semiconductors amid tensions with the United States, Huawei's self-developed chips are now reportedly more widely used than Nvidia products.

According to a survey of 60 executives from Chinese software, finance, manufacturing, and retail companies conducted by Bloomberg Intelligence on July 7 (local time), Huawei's Ascend 910B/C chips were used or under evaluation in 65% of the respondents' AI clusters, the highest among the 12 accelerators surveyed.

This figure is higher than that of Nvidia's China-specific chips, H20/L20 (47%), or the older A800/H800 (47%), which were downgraded in performance to comply with U.S. export controls.

It also surpassed AMD's MI308 chip (55%).

Hygon's DCU (52%) and Cambricon Technologies' MLU/Siyuan (52%) also showed higher adoption and evaluation rates than Nvidia chips.

Chips developed in-house by major platform companies, such as Baidu's Kunlunxin and Alibaba's T-Head, followed at 50%.

Moore Threads' MTT (48%) and MetaX's C-Series (47%) also performed similarly to or better than Nvidia, and accelerators from emerging Chinese semiconductor firms, including Iluvatar CoreX/Tianshu (38%), Enflame CloudBlazer (38%), and Biren BR100/104 (40%), are also undergoing significant review.

Chinese companies stated that they plan to allocate 46% of their AI accelerator budgets to domestic products over the next 12 months.

This is a significant increase from the current level of 30%.

Eighty percent of the responding companies reported that their total infrastructure spending this year exceeded their budgets due to the cost burden of AI-related projects.

The report assessed that "China's efforts to replace AI chips with domestic alternatives are making progress, which is likely to benefit local companies such as Huawei and Hygon."

Tencent, Alibaba, and Huawei, which are major AI infrastructure builders in China, were cited as the biggest beneficiaries of this transition.

While Nvidia products remain popular, their market share is expected to shrink.

Bloomberg reported that the H20 chip, which Chinese authorities have advised local tech firms to avoid using, is becoming increasingly difficult to obtain, and domestic companies are filling that void.

China is allocating approximately 2 trillion yuan (about 450 trillion won) for the construction of data centers nationwide over the next five years, with a policy to ensure that at least 80% of core technologies, including semiconductors, are supplied by domestic firms.

However, the report pointed out that the bottleneck is shifting from pure computing power to the procurement of High Bandwidth Memory (HBM).

In this scenario, it predicted that the growth of foundry companies like SMIC would be constrained by global memory shortages, while memory companies like ChangXin Memory Technologies (CXMT) would benefit from the rebound.