Security firm spots 32 restricted Nvidia chips in China Telecom servers

Israeli security firm Lava identified 32 Nvidia Blackwell Ultra B300 chips running inside the network of China Telecom. The state-owned telecommunications provider operates one of the largest networks in China. The discovery was first reported by The Information. It raises questions about how hardware barred by U.S. export controls ended up in a Chinese data center.

Current rules restrict the sale of this chip class to whitelisted buyers. Those buyers must agree not to pass the units to sanctioned parties. Enforcing these limits has proven difficult. A report from 2025 stated that Chinese companies smuggled $1 billion worth of Nvidia AI chips in three months. At that time, B200 processors were the most sought after. Distributors were already preparing to handle B300-series parts when they became available.

Nvidia did not dispute Lava’s findings. A 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 described this as a drop in the bucket compared to the domestic compute China already has. They added that with tens of millions of GPUs in service in approved countries, the report "demonstrates that smuggling is a nonfactor."

Lava detected the chips using Nvidia’s DCGM Exporter. This software allows data center operators to monitor server health and performance. The tool is intended for internal use but can often be reached from outside the network. It does not always require a password. Nvidia has confirmed it is developing a tool to locate its chips, but that software has not yet been released.

The B300 chip offers 50% more memory and FP4 compute than the earlier B200 model. Nvidia announced the GPU in March 2025 and described it as built for the age of reasoning. It was expected to ship by the end of 2025 and quickly became highly sought after.

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

Demand for Nvidia silicon is lifting prices across the market. Servers built around the five-year-old A100 have tripled in price. Some buyers have reportedly retooled gaming GPUs to run AI workloads amid the continuing crackdown on smuggling.