China Telecom Network Runs 32 Nvidia Chips Barred by US Export Rules
A security firm detected 32 Blackwell Ultra B300 processors in the state-owned carrier's infrastructure, complicating efforts to enforce restrictions on AI hardware sales to Beijing.
By Leila Reynolds ·
Thirty-two Nvidia Blackwell Ultra B300 chips are running inside the network of China Telecom. The state-owned telecommunications provider operates these processors despite US export controls that restrict their sale to buyers in China. Israeli security firm Lava identified the hardware in its recent assessment.
US rules allow this class of chip to be sold only to whitelisted buyers. These entities must agree not to resell the hardware to sanctioned parties, including those in China. Enforcement has remained difficult. A report from 2025 found that Chinese companies smuggled $1 billion worth of Nvidia AI chips in three months. At that time, B200 processors were the primary target, but distributors were already preparing for the arrival of B300-series parts.
Nvidia did not challenge Lava's findings. A company spokesperson told Tom's Hardware that the diversion of controlled products is "insignificant" and "less than one half of one percent" in recent court cases. The spokesperson described the finding as a "drop in the bucket" compared to the domestic compute resources China already possesses. The official added that with tens of millions of GPUs in approved countries, the incident shows that smuggling is a "nonfactor" blocked by governments.
The path these chips took to reach China Telecom is currently unknown. Lava could not determine the exact location of the hardware within the company's network. The firm detected the chips using Nvidia's DCGM Exporter software. This tool is designed for data center operators to monitor server health. It is often accessible from outside the network and does not always require a password. Nvidia is developing a new tool to locate its chips, but that software has not yet been released.
The B300 GPU was announced in March 2025. It provides 50% more memory and FP4 compute capacity than the previous B200 model. Nvidia described the hardware as "built for the age of reasoning," citing its utility for large language models like DeepSeek R1. The chip was expected to ship by the end of 2025 and became a high-demand item quickly.
Legal actions have followed the leak. In August 2026, nine people in Taiwan were indicted for illegally exporting B300 GPUs to China. These indictments came days after Supermicro fired several employees following a smuggling investigation. The scheme involved Flying Tiget Tech, a Taiwanese server trading firm with whitelisted status. Demand for Nvidia silicon has also driven up prices for older hardware. Servers based on the five-year-old A100 have tripled in cost. Some buyers are now retooling gaming GPUs to handle AI workloads.
