Prominent semiconductor manufacturer, Nvidia, is confronting unforeseen American export regulations concerning its H20 chips.

Nvidia disclosed in a Tuesday filing that the U.S. government has stipulated a perpetual license requirement for exporting its H20 AI chips to China, citing concerns that these chips could be utilized in a Chinese supercomputer.

Nvidia projects associated expenses of $5.5 billion during its first fiscal quarter of 2026, concluding on April 27, leading to an approximate 6% decline in the company's stock price in after-hours trading.

The H20 chip represents Nvidia's most sophisticated AI offering permitted for export to China under existing and former U.S. trade regulations.

Interestingly, following this, Nvidia declared on Monday its intention to invest substantial sums over the next four years in the domestic production of specific AI chips, a commitment that analysts noted lacked specific information.

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

Nvidia opted to refrain from offering any commentary.