Lava Detects 32 Nvidia B300 Chips in China Telecom Network

Israeli security company Lava reported on Thursday that it found 32 Nvidia Blackwell Ultra B300 chips operating within the network of China Telecom. The state-owned telecommunications provider hosts these processors despite U.S. export controls that restrict their sale to the country. The discovery was originally reported by The Information and has prompted questions about how the hardware entered a Chinese data center.

Current regulations limit sales of this chip class to whitelisted buyers who agree not to transfer the units to sanctioned parties. Enforcing these limits has proven 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 primary target at that time, distributors were already preparing to handle B300-series parts once they became available.

Nvidia did not dispute the findings but minimized their impact. 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 company argued that this amount is a "drop in the bucket compared to the ocean of domestic compute China already has." The spokesperson added 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."

It remains unclear how the chips reached China Telecom or their exact location within the network. Lava detected the hardware using Nvidia's DCGM Exporter, a tool intended for internal monitoring of server health and performance. The software can often be accessed from outside the data center network without a password. Nvidia has confirmed it is developing a tool to locate its chips but has not yet released it.

The B300 offers 50% more memory and FP4 compute than the previous B200 model. Nvidia announced the GPU in March 2025, describing it as "built for the age of reasoning" for sophisticated large language models like DeepSeek R1. The chip was expected to ship by the end of 2025 and became highly sought after in the market.

Enforcement actions have intensified in response to smuggling. In August 2026, nine people were indicted in Taiwan for illegally exporting B300 GPUs to China. These indictments followed Supermicro's confirmation that it fired several employees after investigating a smuggling scheme. The operation involved Flying Tiget Tech, a Taiwanese server trading firm with whitelisted status for GPU purchases.

Demand for Nvidia silicon is also affecting prices for older hardware. Servers built around the five-year-old A100 have tripled in cost. Amid the crackdown on smuggling, some buyers have reportedly modified gaming GPUs to run AI workloads.