Big chipmaker Nvidia has to follow new rules from the U.S. government that stop it from selling its H20 chips to some countries.

On Tuesday, Nvidia said the U.S. government told them they need a special permission to sell their H20 AI chips to China. This permission will always be needed because the U.S. government is concerned the H20 chips might be used in very powerful computers called supercomputers in China.

Nvidia expects to pay $5.5 billion in costs in the first quarter of their 2026 financial year, which finishes on April 27. After the stock market closed, the company's stock price dropped by about 6%.

The H20 is the best AI chip Nvidia can sell to China under 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. This might be because Nvidia promised to put money into AI data centers in the U.S.

Maybe it's not a coincidence, but Nvidia announced on Monday that they will spend a lot of money, hundreds of millions of dollars, over the next four years to make some AI chips in the U.S. Experts quickly said that the company didn't give many details about this plan.

Several government officials have asked for stricter rules about sending the H20 chip to other countries. They say it was used by a Chinese AI company called DeepSeek to train their AI systems, like the R1 model. This model caused a lot of surprise in the US AI market in January.

Nvidia chose not to give a comment.