Israeli Security Firm Finds 32 Export-Barred Nvidia B300 Chips Inside China Telecom's Network

Israeli security firm Lava says it has identified 32 Nvidia Blackwell Ultra B300 chips operating inside the network of China Telecom, the state-owned provider of telecommunications services in China. The finding, which was reported by The Information, raises questions about how hardware that U.S. export controls bar from the country ended up in a Chinese data center.

Under the current rules, chips of this class can be sold only to whitelisted buyers, who must agree not to pass them on to sanctioned parties, including those in China. Enforcing such limits has proved difficult. A 2025 report said Chinese companies had smuggled in $1 billion worth of Nvidia AI chips over three months. B200 processors were the most sought-after at that point, though some distributors were already preparing to handle B300-series parts once they became available.

Nvidia did not dispute Lava's findings but played down their significance. A spokesperson told Tom's Hardware that governments, researchers and media have found "insignificant diversion of controlled US products, less than one half of one percent in recent court cases, a drop in the bucket compared to the ocean of domestic compute China already has." The spokesperson added that, with tens of millions of GPUs in service in approved countries, the report "demonstrates that smuggling is a nonfactor, blocked by governments on both sides of the globe."

How the chips reached China Telecom remains unknown. Lava also cannot say exactly where in the company's network they are located. The firm detected them using Nvidia's own DCGM Exporter, software that data center operators can install to monitor server health and performance. Although meant for internal use, the tool can often be reached from outside the data center's network and does not always require a password. Nvidia has previously confirmed it is developing a tool that would let it locate its chips, but that software has not been released.

The appeal of the B300 is easy to see. Nvidia announced the data center GPU in March 2025, and it offers 50% more memory and FP4 compute than the earlier B200. The company described it as "built for the age of reasoning" and pointed to more sophisticated large language models such as DeepSeek R1. It was expected to ship by the end of 2025 and quickly became highly sought after.

Enforcement actions have followed. In August 2026, nine people were indicted in Taiwan over the illegal export of B300 GPUs to China. The indictments came only days after Supermicro confirmed it had fired several employees following an investigation into smuggling. The scheme was described as complicated and involved a Taiwanese server trading firm called Flying Tiget Tech, which held whitelisted status for GPU purchases.

Demand for Nvidia silicon is also lifting prices across the market, including for older products. Servers built around the five-year-old A100 have tripled in price. Amid the continuing crackdown on smuggling, some buyers have reportedly resorted to retooling gaming GPUs so they can run AI workloads.