Baidu and Huawei tighten grip on China’s GPU cloud as chipmakers chase IPOs

Baidu and Huawei Technologies collectively accounted for more than 70 per cent of China’s market for cloud services built on home-grown graphics processing units (GPUs) in the first half of 2025, as home-grown artificial intelligence chips gain traction amid rising demand for computing power and a wave of public listing plans.

The figures, published in a Frost & Sullivan report released on Sunday, defined “GPU cloud” providers as companies that controlled the full chip-to-cloud value chain – from proprietary AI chips to computing clusters and cloud services.

Baidu held a 40.4 per cent share, followed by Huawei with 30.1 per cent, the report said.

The findings reflect a broader shift among China’s leading AI chip developers – including Baidu, Huawei and Alibaba Group Holding – as they move beyond individual chip design to build full-stack hardware and software capabilities, in a bid to rival Nvidia’s CUDA ecosystem and meet surging demand for AI training and inference. Alibaba owns the South China Morning Post.

“Through systematic innovation, they are integrating thousands or tens of thousands of self-developed chips into a single, massive virtual computing resource pool,” the report said.

Frost & Sullivan cautioned that China’s domestic GPU market still faced constraints including “hardware performance, software ecosystems, system integration and commercial operations”, meaning only a limited number of vendors had reached large-scale deployment so far.

However, the domestic GPUs would move from being “strategic backups” to “core pillars” for the country’s AI industry over the next three to five years, the report said, adding that these chips were now demonstrating competitive cost-to-performance ratios over general-purpose chips in real-world workloads.