Huawei's Ascend 910C is already sold out in China, but domestic chips still cannot fully replace Nvidia's H200s. The shortage matters beyond China because AI compute constraints, pricing, and supply chain shifts are reshaping how quickly companies worldwide can deploy advanced inference systems.
Nvidia said in its latest earnings report that revenue from Chinese customers buying H200 chips accounted for less than 1% of its data-center revenue in the second quarter of fiscal 2027, ended July 26. The company said it was unable to sell all H200 chips released after a US export license was issued in January 2026, citing opposition from Beijing.
The issue comes as US President Donald Trump has said artificial intelligence (AI) will be a top topic at the September 24 summit with Chinese President Xi Jinping in the US. Even if the two leaders agree to reopen a path for Nvidia shipments, Huawei's Ascend 910C still does not fully cover China's compute shortfall, especially for enterprise customers running demanding inference workloads.
MyDrivers, citing Approaching AI vice president Guan Jiawei, reported the inference market has split sharply, with demand for high-quality tokens far outpacing supply. High-end tasks such as coding require performance levels that domestic Chinese processors still struggle to deliver reliably, leaving Nvidia chips essential for premium workloads.
That imbalance has pushed up rental prices. Approaching AI data showed monthly H200 rental prices rising from CNY50,000 (approx. US$7,420) to CNY80,000 at the end of the third quarter of 2025, to more than CNY100,000 in early 2026, with some buyers unable to secure supply even when willing to pay.
As AI shifts from model training to large-scale deployment, demand for inference compute is rising rapidly. But Chinese-made chips still need to improve in complex inference, forcing AI operators to ration limited Nvidia supply and allocate compute in smaller increments.
Huawei's own chips are also constrained. Industry sources said procurement teams at major Chinese model developers were scrambling in August 2026 to secure more Ascend 910Cs, while spot-market prices briefly rose more than 30%. ByteDance's Volcengine and Alibaba had reportedly already exhausted existing inventory, while Tencent, Baidu, and iFlytek were still waiting for supply.
IDC data showed Huawei shipped about 812,000 Ascend 910Cs in 2025, taking nearly half of China's market, and another 150,000 in the first quarter of 2026. Still, production remains limited by yield, high-bandwidth memory supply, and advanced packaging bottlenecks, leaving Chinese compute demand ahead of domestic capacity.
Article translated by Jingyue Hsiao and edited by Jack Wu
