Nvidia Faces New U.S. Export Controls on H20 Chips
Semiconductor giant Nvidia is grappling with unexpected hurdles as the U.S. government imposes new export controls on its H20 chips. In a recent filing, Nvidia disclosed that it has been notified by the U.S. government about the requirement of obtaining a license to export its H20 AI chips to China. This licensing mandate is set to be in effect indefinitely, with concerns raised by the U.S. government regarding the potential misuse of the H20 chips in supercomputing activities in China.
The implications of these new export controls are significant for Nvidia, as the company anticipates incurring approximately $5.5 billion in related charges in the first quarter of its 2026 fiscal year, ending on April 27. This development has also impacted the company’s stock performance, with a decline of around 6% observed in extended trading.
The H20 chip represents the pinnacle of Nvidia’s AI chip offerings that can be exported to China under existing U.S. export regulations. Recent reports suggested that Nvidia’s CEO, Jensen Huang, may have navigated potential restrictions on the H20 chips during a meeting at President Donald Trump’s Mar-a-Lago estate by committing to increased investments in AI data centers within the U.S.
Following these events, Nvidia made a public announcement about its plans to invest hundreds of millions of dollars over the next four years in the domestic manufacturing of AI chips. Analysts have noted the lack of specificity in Nvidia’s commitment, drawing parallels to similar patterns observed during the Trump administration.
Calls for stricter export controls on the H20 chip have been mounting from various government officials, citing allegations of its utilization in training models developed by Chinese AI startup DeepSeek. Of particular concern is the R1 “reasoning” model, which made waves in the U.S. AI sector earlier this year.
Despite these developments, Nvidia has chosen not to provide any comment on the situation at hand.
