Inside China's Coercive Push for Homegrown AI Chips

Huawei's Ascend Line: The Campaign's Spearhead

Huawei's Ascend chip series is the clear centerpiece of the national push. Last summer, Huawei held a closed-door briefing for Ding Xuexiang to unveil its latest AI chips and lay out a plan to rival Nvidia and achieve self-sufficiency in critical AI areas within three years .

The results have been dramatic:

• Market dominance shift: Per Bernstein Research, Nvidia's share of China's advanced AI chip market cratered from roughly 66% in 2024 to about 8% by mid-2026, while Huawei's share surged to around 50% .
• Supply crunch: Demand for Huawei's Ascend 950 chips skyrocketed after DeepSeek's V4 model — tailored for and trained on Huawei hardware — proved that domestic chips could power competitive AI models .
• Revenue growth: Huawei expects $12 billion in AI chip revenue in 2026, up from $7.5 billion in 2025, representing at least 60% year-over-year growth, with confirmed orders from Alibaba, ByteDance, and Tencent .
• Production breakthrough: Huawei's Ascend 910C chips were successfully used to complete post-training for the DeepSeek-V4-Pro model — a 1.6-trillion-parameter model run on a cluster of at least 1,000 Huawei chips — marking a major step from basic inference into more complex model training .

The GPU IPO Wave: Moore Threads, MetaX, Biren, Iluvatar CoreX

The national campaign directly fueled a frenzy of public listings among Chinese GPU startups, all riding investor enthusiasm for homegrown alternatives to Nvidia.

Concentrated IPO window: Between December 5, 2025 and January 8, 2026, four Chinese GPU companies went public in just five weeks — Moore Threads and MetaX on Shanghai's STAR Market, Biren Technology and Iluvatar CoreX in Hong Kong .

• Moore Threads raised roughly $1.1 billion, with shares surging over 400% on its first trading day after drawing more than 4,000x oversubscription from retail investors .
• MetaX shares skyrocketed 700% during its STAR Market debut two weeks later .
• Iluvatar CoreX and Biren both filed for Hong Kong IPOs, seizing on strong investor appetite for domestic chip stories . As of July 2026, MetaX had also confidentially filed for a second Hong Kong listing .
• At least nine domestic chip companies surpassed 10,000 units in order shipments, and Enflame Technology applied for a STAR Market listing in early 2026 .

The four companies — often dubbed the "GPU Four Dragons" — have collectively raised billions, but the scale of the hype is also a warning: they are burning cash at high rates and remain far from profitable .

The Persisting Scale Gap with Nvidia

Despite real market-share gains inside China, the absolute performance and scale gap with Nvidia remains stark.

Market share by volume: In 2025, Chinese domestic vendors shipped 1.65 million AI accelerator cards — about 41% of China's total ~4 million-unit market — while Nvidia still held ~55% of China's overall AI accelerator server market by shipments . However, in the advanced segment, Nvidia's share fell to roughly 8% per Bernstein .

Performance gap: Per the Council on Foreign Relations (CFR), the best US AI chips are about 5x more powerful than Huawei's best offerings today. CFR projects that gap will widen to 17x by 2027 as Nvidia's next-generation architectures outpace what Huawei can produce under export controls .

Global market share: The four Chinese GPU IPO companies collectively hold less than 3% of the global GPU market while Nvidia dominates the global AI chip industry .

EUV gap: China built a prototype EUV lithography machine by early 2025, but it has yet to produce operational chips. The government aims for functional chips by 2028, though sources believe 2030 is a more realistic timeline — meaning China remains dependent on older fabrication nodes for years .

Overall AI gap: Brookings notes that Chinese AI models still lag US frontier models "by several months or more" across industry benchmarks from math to code generation .

The bottom line is clear: Ding Xuexiang is leading an aggressive, top-down campaign using procurement mandates, subsidies, and nationalist rhetoric to force China's AI sector off Nvidia and onto domestic chips. Huawei's Ascend line has become the primary beneficiary, and a wave of GPU IPOs has raised billions for startups like Moore Threads and MetaX. But these companies collectively hold negligible global GPU market share, and despite real gains inside China, the absolute performance gap with Nvidia's frontier chips remains large — and is projected to widen significantly under current export controls.