Illegal Nvidia B300 chips found Inside China Telecom network, security firm Says

Israeli security firm Lava identifies 32 Blackwell Ultra GPUs despite US export ban; Nvidia downplays significance.

By LineZotpaper

Published23 October 2026

Read Time2 min

Israeli security firm Lava has identified 32 Nvidia Blackwell Ultra B300 GPUs operating within the network of state-owned China Telecom, according to a report by The Information cited by Tom's Hardware. The chips are barred from export to China under US export controls, raising questions about enforcement of restrictions on advanced AI hardware.

Security researchers at Lava discovered the chips by accessing Nvidia's DCGM Exporter tool, which monitors server health and performance and can sometimes be accessed without password authentication from outside the data center network. The exact location of the chips within China Telecom's network could not be confirmed.

Nvidia downplayed the finding but did not deny it. "Governments, researchers, and media have all found insignificant diversion of controlled US products, less than one half of one percent in recent court cases — a drop in the bucket compared to the ocean of domestic compute China already has," an Nvidia spokesperson told Tom's Hardware. "With tens of millions of GPUs in service in approved countries, this report again demonstrates that smuggling is a nonfactor, blocked by governments on both sides of the globe."

The Blackwell Ultra B300, announced in March 2025, offers 50% more memory and FP4 compute than the previous-generation B200 and is marketed as "built for the age of reasoning." It was expected to ship by the end of 2025.

Chinese companies have previously smuggled Nvidia chips despite export restrictions. In 2025, reports indicated that $1 billion worth of Nvidia AI chips were brought into China over three months. In August 2026, nine people were indicted in Taiwan over illegal exports of B300 GPUs to China, days after Supermicro confirmed it had fired several employees following a smuggling investigation. The alleged smuggling operation involved a Taiwanese server trading firm called Flying Tiger Tech, which had whitelisted status for GPU purchases.

It is unclear how the B300 chips found their way into China Telecom's server racks. Nvidia previously confirmed it was working on a tool to allow its chips to be located, but that tool has not been released.

Analysis

Why This Matters

The discovery suggests US export controls on advanced AI chips may continue to be bypassed, potentially undermining efforts to limit China's AI capabilities.
China Telecom's involvement, as a state-owned telecommunications provider, highlights possible state-level access to restricted hardware.
The lack of authentication on Nvidia's monitoring tool raises both security and enforcement issues.

Background

Since 2022, the US government has imposed export restrictions on high-performance semiconductors and chipmaking equipment to China, citing national security concerns. Nvidia's A100, H100, B200, and B300 GPUs have been among the chips subject to these controls. Despite the ban, reports of smuggling have persisted, including a 2025 report that $1 billion worth of Nvidia chips were illegally brought into China in three months. Legal actions have followed, with indictments in Taiwan and internal corporate investigations.

Key Perspectives

US regulators and lawmakers: Likely to view the finding as evidence that export controls need stronger enforcement and possibly more secure supply chains. Chinese firms and state enterprises: Face strong demand for advanced AI compute and may turn to grey-market channels when official access is blocked. Nvidia: Argues that smuggling represents an insignificant fraction of total global GPU deployment and that enforcement is working.

What to Watch

Whether US regulators impose additional restrictions or penalties on Nvidia or other parties.
Further discoveries of restricted chips in Chinese networks using Nvidia's monitoring tool.
Release of Nvidia's promised location-tracking tool for its chips.
Legal outcomes of the Taiwan indictments and the Supermicro investigation.

Sources

Illegal Nvidia Blackwell Ultra B300 GPUs found inside state-owned China Telecom's network · Latest from Tom's Hardware

Checked

12 claims in this story checked against 1 source: 10 supported.

Show each claim

Partly supportedThe headline calls the B300 chips found in China Telecom’s network “Illegal.”Latest from Tom's Hardware: “These same chips have already been barred from export by U.S. export controls”
SupportedLava identified 32 Blackwell Ultra B300 chips within China Telecom’s network.Latest from Tom's Hardware: “Lava, an Israeli security firm, says that it has been able to identify 32 Nvidia Blackwell Ultra B300 chips within the network of China Telecom”
SupportedThe B300 chips are barred from export to China under US export controls.Latest from Tom's Hardware: “These same chips have already been barred from export by U.S. export controls”
SupportedNvidia downplayed the report but did not deny the findings.Latest from Tom's Hardware: “Nvidia has downplayed the report but didn't deny the findings.”
SupportedAn Nvidia spokesperson said, “Governments, researchers, and media have all found insignificant diversion of controlled US products, less than one half of one percent in recent court cases — a drop in the bucket compared to the ocean of domestic compute China already has,”Latest from Tom's Hardware: “Governments, researchers, and media have all found insignificant diversion of controlled US products, less than one half of one percent in recent court cases — a drop in the bucket compared to the ocean of domestic compute China already has,”
SupportedAn Nvidia spokesperson said, “With tens of millions of GPUs in service in approved countries, this report again demonstrates that smuggling is a nonfactor, blocked by governments on both sides of the globe.”Latest from Tom's Hardware: “With tens of millions of GPUs in service in approved countries, this report again demonstrates that smuggling is a nonfactor, blocked by governments on both sides of the globe.”
SupportedLava identified the chips via Nvidia’s DCGM Exporter, a tool that monitors server health and performance and can sometimes be accessed from beyond the data center network without a password.Latest from Tom's Hardware: “Lava identifying them via Nvidia's own DCGM Exporter tool. The software can be installed by data center operators and is used to monitor server health and performance, and while designed for internal use, it can oftentimes be accessed beyond the data center's network. Oddly, it doesn't always require password authentication, either.”
SupportedLava could not confirm the chips’ exact location within China Telecom’s network.Latest from Tom's Hardware: “nor can Lava confirm exactly where within the company's network they are located.”
SupportedIn 2025, reports indicated that Chinese companies brought $1 billion worth of Nvidia AI chips into China over three months.Latest from Tom's Hardware: “In 2025, it was reported that Chinese companies smuggled $1 billion worth of Nvidia AI chips into the country in three months.”
SupportedIn August 2026, nine people were indicted in Taiwan over illegal exports of B300 GPUs to China.Latest from Tom's Hardware: “In August 2026, nine people were indicted in Taiwan over the illegal export of B300 GPUs to China.”
SupportedSupermicro confirmed it had fired several employees following a smuggling investigation, days before the Taiwan indictments.Latest from Tom's Hardware: “This came just days after Supermicro confirmed that it had fired several employees following an investigation into smuggling.”
Partly supportedThe smuggling process involved a Taiwanese server trading firm called Flying Tiger Tech, which had whitelisted status for GPU purchases.Latest from Tom's Hardware: “The complicated smuggling process included the use of a Taiwanese server trading firm called Flying Tiget Tech — a firm with whitelisted status for GPU purchases.”