While Nvidia is riding high on the AI wave, a competitor has quietly ramped up its efforts and this time, it will not be so quiet. Several of Huawei’s advances in artificial intelligence have proven to be significant. Not that long ago, Huawei made its name in the West as a smartphone and telecom gear manufacturer. For Nvidia investors, the rise of a Chinese giant could amount to more than just a geopolitical disturbance, it could mean a reliable threat to GPU titan, especially in markets outside China.

Nvidia’s AI Lead is not certain

Nvidia has experienced explosive growth primarily due to its graphics processing units (GPUs), which have practically become generic hardware for the training and running of large language models (LLMs). On the contrary, with the tightening of U.S export controls prohibiting access to Nvidia’s most advanced chips that are no longer easily accessible , the Chinese companies are pouring money into developing their own replacements. Huawei’s Ascend AI chips, including the relatively newer version 910B, have shown satisfactory performance  in recent benchmarks and are now being advertised as competitors to Nvidia’s A100 and H100 chips.

Huawei is rapidly gaining momentum in China. Recently, they have begun to provide their AI chips to large cloud service providers like Baidu and Tencent, and demand seems to be roaring lately. If the Kunpeng + Ascend AI stack is not yet in good shape concerning the software ecosystem and developer tools, these may soon turn out to be quite a tempting, localized option for Chinese enterprises struggling with sanctions or total cost of U.S-made chips.

Nvidia at the Forefront and High Risks

Nvidia is the unquestioned king of AI with Huawei having come of age as a rival. Its earnings for Q1 2025 shattered expectations with data-center revenue more than doubling the year-over-year quarter. With its CUDA ecosystem unmatched in terms of developer support and continuous innovation with next-gen Blackwell GPUs, Nvidia has a huge channel that other fast challengers will find hard to cross.

Nevertheless, there are risks that might become critical in the future. Nvidia might lose Chinese market share bit by bit as Huawei’s chips gradually become cheaper, faster and readily available in Asia. Nvidia could face gradual erosion of Chinese market share, which has historically accounted  for over 20% of its data-center business. These factors toward Huawei’s AI vision are further contributing to the worldwide shattering of the AI supply chain, thus complicating Nvidia’s international strategy in the long run.

A Doubly Down Opportunity?

Investors must not panic for now, but Nvidia investors must keep an eye on this. Huawei’s recovery in AI is really happening, and it may not globally dethrone Nvidia but may over the years begin to take important slices in certain segments. For the cautious ones, this may be the time to look at diversification, or a rare opportunity to double up if one thinks Nvidia is just warming up to take center stage. The real risk comes by strangling Nvidia slowly through steady undermining over months, especially in markets where U.S chip restrictions are biting the hardest. The message to Nvidia investors is straightforward, Huawei’s rise may not create panic, but it certainly warrants attention.