Nvidia, a prominent player in the semiconductor industry, is encountering unexpected U.S. export controls on its H20 chips. According to a filing on Tuesday, Nvidia disclosed that the U.S. government has informed the company that a license will be required to export its H20 AI chips to China. This requirement is set to remain indefinitely, as the U.S. government expressed concerns that the H20 chips might be utilized in a Chinese supercomputer.
The company projects that these restrictions will lead to $5.5 billion in related charges during its first fiscal quarter of 2026, concluding on April 27. As a result, Nvidia’s stock experienced a decline of approximately 6% in extended trading sessions.
The H20 chip represents the most advanced AI technology that Nvidia is permitted to export to China under both current and previous U.S. export regulations. Recently, NPR reported that CEO Jensen Huang might have successfully negotiated an exception from new H20 restrictions at a dinner held at President Donald Trump’s Mar-a-Lago resort. Part of this negotiation involved assurances that Nvidia would invest in AI data centers within the U.S.
In alignment with these discussions, Nvidia announced on Monday its intention to invest hundreds of millions of dollars in the U.S. over the next four years for the manufacturing of some AI chips. Observers quickly noted that the details regarding the company’s commitment were somewhat vague.
Calls from multiple government officials for stricter export controls on the H20 arose due to allegations that the chip was utilized by China-based AI startup DeepSeek to train models, such as the R1 “reasoning” model, which significantly impacted the U.S. AI market in January.
Nvidia did not provide a comment on the matter.
