Prominent semiconductor corporation Nvidia is contending with unforeseen additional U.S. export restrictions impacting its H20 chips.

In a recent filing, Nvidia disclosed that the U.S. government has mandated an export license for its H20 AI chips destined for China, citing the potential risk of their use in Chinese supercomputers; this requirement is to remain in effect indefinitely.

Nvidia expects to incur charges of approximately $5.5 billion in connection with this matter during the first quarter of its 2026 fiscal year, concluding on April 27, and consequently, the company's stock price experienced a decline of roughly 6% in after-hours trading.

Nvidia's H20 represents the pinnacle of AI chip technology the company is permitted to export to China, adhering to both current and former U.S. regulations. Following NPR's report last week, speculation arose that CEO Jensen Huang may have influenced a decision to avoid new H20 limitations during a dinner at President Donald Trump's Mar-a-Lago resort, potentially by pledging Nvidia's commitment to investing in U.S.-based AI data centres.

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

Many government officials wanted stricter controls on sending the H20 chip to other countries. This was because the chip was reportedly used by a Chinese AI company called DeepSeek to train their models, like the R1 'reasoning' model. This model caused a lot of disruption in the U.S. AI market in January.

Nvidia opted to refrain from comment.