The large company Nvidia is facing new rules from the U.S. that limit sending its H20 chips to other countries.

On Tuesday, Nvidia said in a document that the U.S. government told them they need permission to send their H20 AI chips to China. This permission will always be needed, according to the document, because the U.S. government is worried that the H20 might be used in a powerful computer in China.

Nvidia thinks it will have costs of about $5.5 billion in the first quarter of its 2026 financial year, which finishes on April 27. The company's stock price went down by about 6% after the market closed.

The H20 is the best AI chip Nvidia can send to China based on the current and past rules from the U.S. Last week, NPR said that CEO Jensen Huang might have stopped new rules about the H20 during a dinner with President Donald Trump. He may have done this partly by saying that Nvidia would put money into AI data centers in the U.S.

Maybe it was not a coincidence that Nvidia announced on Monday it would spend a lot of money in the next four years to make some AI chips in the U.S. People who know a lot about the topic quickly said that the company did not give many details about its plan.

Several government officials asked for stricter rules on sending the H20 chip to other countries. They thought the chip was used by a Chinese AI company called DeepSeek to train their AI models, like the R1 "reasoning" model that surprised the U.S. AI market in January.

Nvidia chose not to give a comment.