China Telecom: 32 Banned Nvidia B300s Detected

Thirty-two Nvidia Blackwell Ultra B300 chips are running inside the network of China Telecom. The state-owned telecommunications provider operates the hardware despite U.S. export controls that restrict sales of this class of processor to the country. Israeli security firm Lava reported the detection on October 23, a finding that draws attention to gaps in current enforcement mechanisms.

U.S. rules limit the sale of these high-end chips to whitelisted buyers who agree not to pass them to sanctioned parties, including entities in China. Lava says the B300s were identified using Nvidia’s DCGM Exporter, a software tool designed for internal server monitoring. The tool often remains accessible from outside the data center network without a password, allowing external observers to detect the hardware. Lava could not specify the exact physical location of the chips within China Telecom’s infrastructure.

Nvidia did not dispute the technical findings but minimized their impact. A spokesperson stated that recent court cases show an "insignificant diversion of controlled US products," citing figures less than 0.5% in specific litigation. The company argued that with tens of millions of GPUs in service in approved countries, the discovery demonstrates that smuggling is a "nonfactor" compared to the massive volume of domestic compute capacity China already possesses.

The B300 offers 50% more memory and FP4 compute capability than its predecessor, the B200. Nvidia announced the chip in March 2025, describing it as "built for the age of reasoning" to support sophisticated large language models like DeepSeek R1. The processor was expected to ship by the end of 2025 and quickly became a target for procurement due to its performance gains.

Enforcement efforts have intensified in response to smuggling concerns. In August 2026, authorities in Taiwan indicted nine individuals for the illegal export of B300 GPUs to China. The indictments followed Supermicro’s confirmation that it had fired several employees after an internal investigation. The scheme involved a Taiwanese server trading firm, Flying Tiget Tech, which held whitelisted status for GPU purchases. A separate 2025 report indicated that Chinese companies had smuggled $1 billion worth of Nvidia AI chips over a three-month period.

Market conditions have driven demand for Nvidia silicon across all product lines. Servers built around the five-year-old A100 GPU have seen prices triple. Some buyers have reportedly retooled gaming GPUs to run AI workloads as a workaround for the crackdown on smuggling. Lava noted that Nvidia is developing a tool to locate its chips, but that software has not yet been released.