Did loosening export rules in January bring Nvidia's China market share back?

No. Even after the January 2026 loosening, Bernstein Research projected Nvidia's China market share would keep falling toward around 8 percent by year end, suggesting the substitution toward domestic alternatives like Huawei was already largely locked in [PROJECTED].

Is the export control policy a coherent long-term strategy?

That is disputed. Some analysts read the loosen-then-tighten pattern as a deliberate, adaptive response to new information each round. Others describe it as reflecting genuine disagreement within the government about how to balance security and commercial interests, not a single coordinated strategy.

tech · 2025 to 2026

The Export Control Seesaw

Washington loosened AI chip export rules to China in January, then tightened them again in May. Each swing is a move in an ongoing contest, not a settled policy, and the previous round's substitution effects do not simply reverse.

Facts verified as of July 2026.

On January 13, 2026, the Bureau of Industry and Security revised its license review policy for advanced semiconductors, moving to case-by-case review of export applications for Nvidia's H200 and AMD's MI325X chips to China, chips whose export had previously been effectively blocked [VERIFIED]. Conditions attached to the policy included a cap limiting Chinese shipments to no more than half the volume a company sold to US customers, third-party testing to confirm chip capabilities before shipment, and a requirement that Chinese customers demonstrate sufficient security procedures and certify against military use [VERIFIED].

The loosening did not reverse the underlying market shift already under way. Bernstein Research projected Nvidia's share of China's AI chip market would fall to around 8 percent by the end of 2026, down from roughly 95 percent before export controls began in earlier years, as domestic supplier Huawei's share grew toward roughly half the market [PROJECTED].

Play the same structure: The License Flip.

Sources

[VERIFIED] On January 13, 2026, BIS moved to case-by-case review of H200 and MI325X chip exports to China, with conditions including a volume cap and third-party testing. Bureau of Industry and Security, Department of Commerce Revises License Review Policy for Semiconductors Exported to China
[VERIFIED] The US approved Nvidia H200 chip exports to China with conditions in January 2026. NBC News, US approves Nvidia H200 chip exports to China with some conditions
[VERIFIED] On May 31, 2026, BIS closed a loophole allowing China-headquartered firms to acquire advanced Nvidia chips through overseas subsidiaries, basing license requirements on ultimate parent headquarters. CNBC, US takes step to halt Nvidia AI chip shipments to Chinese firms outside China
[PROJECTED] Bernstein Research projected Nvidia's China AI chip market share would fall to around 8 percent by the end of 2026 as Huawei's share grew toward roughly half the market. ABC News (AP), Nvidia's AI chip sales in China stall, as local chipmakers like Huawei take the lead