China Races to Reduce Reliance on Nvidia, Triples AI Chip Output by 2026

As of August 27, 2025, China is making significant strides to reduce its reliance on Nvidia's artificial intelligence (AI) chips. The country is aiming to triple its AI chip production capacity by 2026, according to the Financial Times.

Huawei, one of China's leading tech companies, is at the forefront of this push. The company plans to begin production at a new plant dedicated to making AI chips by the end of this year. Additionally, Huawei has two more AI chip facilities scheduled to launch in 2026. While the ownership of these plants remains unclear, their combined output could surpass the current production capacity of similar lines at China's top chipmaker, Semiconductor Manufacturing International Corporation (SMIC).

Alongside Huawei's expansion, SMIC is also planning to double its manufacturing capacity for 7-nanometer chips next year, with Huawei being its largest customer. This move is part of China's broader effort to accelerate the development of domestic AI chips that can rival the performance of Nvidia's China-specific H20 chip, which the government has expressed security concerns about.

The push for self-reliance in AI chip technology is a critical priority for China, as it seeks to reduce its dependence on foreign suppliers and strengthen its technological capabilities in this strategic industry.