Nvidia B300 GPUs Detected in China Telecom Network by Israeli Security Firm

Nvidia Blackwell Ultra B300 graphics processing units have been identified within the internal network of China Telecom, a state-owned telecommunications provider in China. The discovery was made by Lava, an Israeli cybersecurity firm, which confirmed the presence of the hardware despite U.S. export controls that generally prohibit the sale of these specific high-performance chips to the country. The findings raise fresh questions about the efficacy of current trade restrictions on advanced semiconductor technology.

Lava reported identifying exactly 32 B300 chips inside the data center infrastructure of China Telecom. These processors are part of Nvidia’s latest generation of AI-focused hardware and are subject to strict U.S. export regulations. Under current rules, such chips can only be sold to buyers on an approved whitelist who agree not to transfer them to sanctioned parties, a category that includes various entities within China. The presence of these specific units in a major state-owned network suggests a breach in the distribution chain or a successful evasion of compliance measures.

The detection was achieved using Nvidia’s own DCGM Exporter tool, a software utility installed by data center operators to monitor server health and performance. Although designed for internal diagnostic use, the tool can often be accessed from outside the local network and frequently does not require password authentication. This vulnerability allowed Lava to locate the chips without physical access to the server racks. Nvidia has previously acknowledged working on a dedicated tracking tool for its chips, but that solution has not yet been released to the public.

Nvidia responded to the report by characterizing the incident as statistically insignificant relative to the broader market. A company spokesperson stated that recent court cases and government reviews have shown that the diversion of controlled U.S. products is less than half of one percent. The spokesperson described this leakage as "a drop in the bucket" when compared to the massive volume of domestic compute capacity China already possesses. Nvidia emphasized that with tens of millions of its GPUs in service in approved countries, the company maintains that smuggling remains a non-factor due to enforcement actions by governments on both sides of the Pacific.

The B300 chip has become a high-value target for Chinese firms due to its significant performance advantages over previous models. Announced in March 2025, the Blackwell Ultra GPU offers 50% more memory and FP4 compute capability than the prior-generation B200. Nvidia positioned the hardware as "built for the age of reasoning," highlighting its suitability for advanced large language models. The chip was originally scheduled to ship by the end of 2025 and quickly became a sought-after asset in the global AI market.

The difficulty in restricting the flow of these chips is not new. In 2025, reports indicated that Chinese companies smuggled approximately $1 billion worth of Nvidia AI chips into the country over a three-month period. At that time, the B200 was the most in-demand model, but distributors were already preparing to move B300-series units as soon as they became available. The current discovery at China Telecom adds to a growing list of evidence that export controls face persistent challenges in implementation and enforcement.

Recent legal actions in Taiwan have also targeted the illicit export of these components. In August 2026, nine individuals were indicted in Taiwan for the illegal export of B300 GPUs to China. This indictment followed closely on the heels of Supermicro firing several employees after an internal investigation into smuggling practices. The smuggling operation reportedly involved a Taiwanese server trading firm named Flying Tiget Tech, which held whitelisted status for purchasing GPUs, allowing it to act as a conduit for the hardware.

The high demand for Nvidia silicon has driven up prices for older generations of the company’s hardware. A100 servers, which are now five years old, have seen their prices triple, with units costing up to $82,000. The scarcity of newer chips has even led some organizations to retool gaming GPUs to handle AI workloads where possible. For Nvidia, the challenge remains balancing the need to supply its approved global customers while minimizing the leakage of its most advanced technology into markets where it is restricted.

While Lava has confirmed the presence of the 32 B300 chips, it remains unclear exactly how they entered China Telecom’s server racks or their specific location within the company’s network. The incident underscores the ongoing tension between U.S. export policy and the global demand for high-performance AI computing power. As Nvidia continues to develop new tracking tools and governments refine enforcement strategies, the issue of chip smuggling is likely to remain a central focus in the semiconductor industry.