China Telecom Network Runs 32 Restricted Nvidia B300 Chips

Thirty-two Nvidia Blackwell Ultra B300 chips are currently operating within the network of China Telecom, the state-owned telecommunications provider. Israeli security firm Lava identified the hardware, a finding first reported by The Information. The discovery raises immediate questions for industry observers about how processors barred from China by U.S. export controls ended up installed in a Chinese data center.

Current trade rules allow this class of chip to be sold only to whitelisted buyers. Those buyers must agree not to pass the hardware to sanctioned parties, including entities in China. Enforcement has been difficult. A 2025 report indicated that Chinese companies smuggled $1 billion worth of Nvidia AI chips over a three-month period. While B200 processors were the most sought-after at that time, distributors were already preparing to handle B300-series parts.

Nvidia did not dispute the findings but minimized their impact. A company spokesperson told Tom's Hardware that recent court cases show an "insignificant diversion of controlled US products, less than one half of one percent." The spokesperson noted 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."

Lava detected the chips using Nvidia's DCGM Exporter, a software tool used by data center operators to monitor server health. Although intended for internal use, the tool can often be accessed from outside the network without a password. Lava could not determine the exact physical location of the servers within China Telecom's infrastructure. Nvidia has confirmed it is developing a tool to locate its chips, but that software has not yet been released.

The B300 was announced in March 2025. It offers 50% more memory and FP4 compute than the earlier B200 model. Nvidia described the chip as built for the age of reasoning, citing more sophisticated large language models. The processor was expected to ship by the end of 2025 and quickly became a high-demand item in the market.

Regulatory authorities have taken action against illegal exports. In August 2026, nine people were indicted in Taiwan for illegally exporting B300 GPUs to China. The indictments followed an investigation by Supermicro, which fired several employees. The scheme involved a Taiwanese server trading firm called Flying Tiget Tech, which held whitelisted status for GPU purchases.

High demand for Nvidia silicon has lifted prices across the market. Servers built around the five-year-old A100 chip have tripled in price. Amid the crackdown on smuggling, some buyers have reportedly retooled gaming GPUs to run AI workloads.