Big chip company Nvidia is facing unexpected new rules from the U.S. about sending out its H20 chips.

On Tuesday, Nvidia announced that the U.S. government told them they must get a license to send their H20 AI chips to China. They said in a document that this license will always be needed because the U.S. government is worried the chips could be used in a powerful computer in China.

Nvidia expects to have costs of around $5.5 billion in the first quarter of its 2026 financial year, which ends on April 27. The company's stock price dropped by about 6% after the market closed.

The H20 is the best AI chip Nvidia is allowed to sell to China under the U.S.'s current and past export rules. Last week, NPR reported that Nvidia's CEO, Jensen Huang, might have stopped new rules about the H20. This could have happened during a dinner at President Donald Trump's resort, Mar-a-Lago. One reason might be that Nvidia promised to put money into AI data centers in the U.S.

Maybe it's not a surprise that Nvidia announced on Monday they will spend a lot of money, hundreds of millions of dollars, to make some AI chips in the U.S. in the next four years. People who know a lot about this quickly said that the company didn't share many specific details about their plan.

Several government officials wanted stricter rules for exporting the H20 chip. They thought a Chinese company called DeepSeek used the chip to train their AI models, like the R1 model. This R1 model surprised the U.S. AI market in January.

Nvidia chose not to give a comment.