China Telecom: Lava identifies 32 export-controlled Nvidia B300 chips in its network
The discovery of 32 Blackwell Ultra GPUs in the state-owned carrier's infrastructure raises questions about enforcement gaps in U.S. semiconductor export rules.
By Chioma Kuznetsov ·
Israeli security firm Lava identified 32 Nvidia Blackwell Ultra B300 chips operating within the network of China Telecom. The state-owned telecommunications provider uses the hardware for its data center operations. The finding indicates that chips subject to U.S. export restrictions are functioning inside the Chinese infrastructure. The detection was first reported by The Information.
Current regulations allow these specific chips to be sold only to whitelisted buyers. These buyers must agree not to pass the hardware to sanctioned parties, including entities in China. Enforcement of these limits has proven difficult. A 2025 report stated that Chinese companies smuggled $1 billion worth of Nvidia AI chips over a three-month period. B200 processors were the most sought during that time, but distributors prepared for B300-series parts as availability increased.
Nvidia did not dispute the findings but characterized the impact as minor. A spokesperson told Tom's Hardware that governments and researchers have found insignificant diversion of controlled U.S. products. The spokesperson noted that less than one half of one percent of such products were diverted in recent court cases. They described this as a drop in the bucket compared to the ocean of domestic compute China already possesses. With tens of millions of GPUs in service in approved countries, the spokesperson argued that smuggling is a nonfactor blocked by governments on both sides of the globe.
The method used to place the chips in China Telecom remains unknown. Lava cannot pinpoint the exact location within the company's network. The firm detected the hardware 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 accessed from outside the data center network. It does not always require a password. Nvidia is developing a separate tool to locate its chips, but that software has not yet been released.
The B300 GPU offers 50% more memory and FP4 compute than the earlier B200 model. Nvidia announced the processor in March 2025. The company described it as built for the age of reasoning, citing its suitability for sophisticated large language models such as DeepSeek R1. The chip was expected to ship by the end of 2025 and quickly became highly sought after in the market.
Enforcement actions have followed the discovery of smuggling schemes. In August 2026, nine people were indicted in Taiwan over the illegal export of B300 GPUs to China. These indictments came days after Supermicro confirmed it fired several employees following an investigation. The scheme involved a Taiwanese server trading firm called Flying Tiget Tech, which held whitelisted status for GPU purchases.
Demand for Nvidia silicon is lifting prices across the market, including for older products. Servers built around the five-year-old A100 have tripled in price. Some buyers have resorted to retooling gaming GPUs to run AI workloads amid the continuing crackdown on smuggling.
