Semiconductor giant Nvidia is facing unexpected new US export controls on its H20 AI chips, a move that could significantly impact the company's revenue and operations. In a filing on Tuesday, Nvidia revealed that it was informed by the US government that it will need a license to export its H20 AI chips to China, citing concerns that the chip could be used in a supercomputer in China.

The license requirement will be in place indefinitely, according to the filing, and Nvidia anticipates $5.5 billion in related charges in its Q1 2026 fiscal year, which ends April 27. The news sent Nvidia's stock tumbling, with shares down around 6% in extended trading.

The H20 is the most advanced AI chip that Nvidia can export to China under the US's current and previous export rules. The chip has been at the center of controversy in recent weeks, with multiple government officials calling for stronger export controls due to concerns that it was being used to train models from China-based AI startup DeepSeek. In January, DeepSeek's R1 "reasoning" model caused a stir in the US AI market, prompting calls for greater scrutiny of AI chip exports to China.

Interestingly, the news comes just days after Nvidia CEO Jensen Huang was reported to have had a dinner meeting with President Donald Trump at his Mar-a-Lago resort. During the meeting, Huang allegedly committed to investing in AI data centers in the US, which some pundits believe may have been an attempt to stave off new export controls on the H20 chip. However, Nvidia announced on Monday that it would spend hundreds of millions of dollars over the next four years manufacturing some AI chips in the US, a move that was seen as lacking in detail.

The US government's decision to impose export controls on the H20 chip is likely to have significant implications for the global AI market. With China increasingly reliant on AI technology, the move could limit the country's access to advanced AI chips and hinder its ability to develop its own AI capabilities. For Nvidia, the news could lead to a significant loss of revenue, particularly if the company is unable to secure the necessary licenses to export its H20 chips to China.

The development also highlights the ongoing tensions between the US and China over technology and trade. The US has been increasingly wary of China's growing technological prowess, and has taken steps to limit the country's access to advanced technology, including AI chips. The move is likely to be seen as a further escalation of these tensions, and could have significant implications for the global tech industry.

As the situation continues to unfold, one thing is clear: the US government's decision to impose export controls on the H20 chip is a significant blow to Nvidia, and could have far-reaching implications for the global AI market. With the company's stock already taking a hit, it remains to be seen how Nvidia will respond to this new challenge, and what the long-term implications will be for the company and the industry as a whole.