The Trump administration is considering stricter export controls on Nvidia’s H20 chips for the Chinese market, according to sources familiar with the matter.

These AI chips, designed to comply with earlier US restrictions, may face new limitations amid concerns over China’s growing AI capabilities.

The discussions are in early stages, but officials are reassessing policies following reports that Chinese startup DeepSeek developed a competitive AI model using older Nvidia chips.

The Biden administration had previously imposed AI chip export restrictions but allowed some shipments, including the H20.

Nvidia warned that further restrictions could accelerate China’s efforts to develop domestic alternatives, potentially weakening US companies.

The news has caused Nvidia’s stock to drop nearly 7%, reflecting investor concerns over tighter semiconductor regulations and increased global AI competition.