China Telecom Network Confirmed Running 32 Banned Nvidia B300 Chips

Thirty-two Nvidia Blackwell Ultra B300 chips are currently operating inside the network of China Telecom, the state-owned telecommunications provider in China. Israeli security firm Lava announced the discovery on October 23, identifying hardware that U.S. export controls prohibit from entering the country. The detection raises immediate questions about how restricted processors bypassed government screening to reach a major Chinese data center.

The B300 is a high-performance data center GPU that Nvidia announced in March 2025. The chip offers 50% more memory and FP4 compute capability than its predecessor, the B200. Nvidia marketed the hardware as built for the age of reasoning, specifically citing its utility for advanced large language models like DeepSeek R1. Because of these specifications, the processor became a high-demand target for buyers seeking to expand their AI infrastructure.

Current export rules allow these chips to be sold only to whitelisted buyers who agree not to pass them to sanctioned parties, including entities in China. Enforcement has struggled to keep pace with demand. A report from 2025 estimated that Chinese companies smuggled $1 billion worth of Nvidia AI chips over a three-month period. While B200 processors were the primary target at that time, distributors were already preparing to handle B300-series parts as they entered the market.

Nvidia did not dispute Lava’s findings but characterized the diversion as minor. A spokesperson told Tom's Hardware that recent court cases show an insignificant diversion of controlled products, amounting to less than half of one percent. The company noted that tens of millions of GPUs are in service in approved countries, arguing that the findings demonstrate smuggling is a nonfactor blocked by governments on both sides of the globe.

The mechanism behind the detection offers a glimpse into how such gaps occur. Lava identified the chips using Nvidia’s DCGM Exporter, a software tool intended for internal server health monitoring. The tool is often accessible from outside the data center network and does not always require a password. Nvidia has confirmed it is developing a specific tool to locate its own chips, but that software has not yet been released.

Enforcement actions against smuggling have accelerated in recent months. In August 2026, nine people were indicted in Taiwan for illegally exporting B300 GPUs to China. These indictments followed days after Supermicro confirmed it fired several employees during an investigation into a smuggling scheme. That scheme involved Flying Tiget Tech, a Taiwanese server trading firm with whitelisted status for GPU purchases.

The scarcity of advanced hardware has driven up prices for older equipment. Servers built around the five-year-old A100 chip have tripled in cost. Some buyers have reportedly begun retooling gaming GPUs to run AI workloads as they navigate the continuing crackdown on restricted silicon imports.