Nvidia B300 GPUs Found in China Telecom Infrastructure

Israeli security firm Lava reported on Thursday that it detected 32 Nvidia Blackwell Ultra B300 chips operating inside the network of China Telecom. The state-owned telecommunications provider hosts the hardware in a manner that violates current U.S. export controls, which restrict the sale of this specific class of processors to whitelisted buyers who agree not to resell to sanctioned parties in China.

The discovery adds to recent concerns about hardware leakage. A report from 2025 estimated that Chinese companies smuggled $1 billion worth of Nvidia AI chips over a three-month period. While B200 processors were the primary target at that time, distributors were already positioning themselves to handle the newer B300 series once it became available. The B300, announced in March 2025, offers 50% more memory and FP4 compute performance than the B200 and was marketed for running complex large language models like DeepSeek R1.

Nvidia responded to the news without disputing the physical presence of the chips. A spokesperson for the company told Tom's Hardware that the findings represent an insignificant diversion of controlled U.S. products. The spokesperson cited recent court cases where the diversion rate was less than half of one percent, describing the amount as a drop in the bucket compared to the domestic compute capacity China already possesses. Nvidia argued that with tens of millions of GPUs in service in approved countries, the report demonstrates that smuggling is a nonfactor.

Lava identified the chips using Nvidia's DCGM Exporter software. This tool is designed for data center operators to monitor server health and performance. Although intended for internal use, the exporter can often be accessed from outside the data center network and does not always require a password. Lava has not yet determined the exact physical location of the servers within China Telecom's infrastructure, nor has it confirmed the specific route the hardware took to reach China.

Enforcement efforts against such transfers have intensified in 2026. In August, nine individuals in Taiwan were indicted for the illegal export of B300 GPUs to China. These indictments followed an investigation by Supermicro, which fired several employees linked to the scheme. The operation involved a Taiwanese server trading firm named Flying Tiget Tech, which held the whitelisted status required for GPU purchases.

The scarcity of these chips is influencing market prices. Servers built around the five-year-old A100 architecture have seen their prices triple. As the crackdown on smuggling continues, some buyers have reportedly modified gaming GPUs to handle AI workloads, highlighting the persistent demand for Nvidia silicon.

Nvidia is currently developing a tool that would allow the company to locate its chips remotely, but that software has not yet been released to the public.