Prominent semiconductor manufacturer Nvidia is contending with unforeseen U.S. export regulations targeting its H20 chips.

Nvidia disclosed in a Tuesday filing that the U.S. government has mandated a perpetual export license for its H20 AI chips destined for China, citing concerns over their potential deployment in Chinese supercomputers.

Nvidia projects associated expenses of $5.5 billion in its first fiscal quarter of 2026, concluding on April 27; consequently, the company's stock experienced a decline of approximately 6% in after-hours trading.

The H20 is the most sophisticated AI chip Nvidia is currently permitted to export to China, in accordance with both existing and earlier U.S. export regulations.

In a potentially related development, Nvidia declared on Monday its intention to invest substantial sums, specifically hundreds of millions of dollars, over the forthcoming four years in the production of select AI chips within the United States. Commentators promptly highlighted the notable lack of specific information regarding the company's stated commitment.

Several government officials wanted stronger rules on sending the H20 chip to other countries. This is because people said the chip was used by a Chinese AI company called DeepSeek to train their AI models. One of these models was the R1 "reasoning" model, which caused a lot of problems in the U.S. AI market in January.

Nvidia opted to refrain from offering any commentary.