Banned Nvidia B300 Chips Found Deep Inside China's State Telecom Network

Thirty-two Nvidia Blackwell Ultra B300 chips are currently operating inside the network of China Telecom, a state-owned telecommunications provider. These specific processors have been banned from export to China under U.S. regulations. The discovery raises urgent questions about how hardware restricted by Washington ended up in a major Chinese data center.

The B300 is a high-performance AI data center chip. U.S. export controls dictate that it can only be sold to buyers on a whitelist. These approved partners agree not to pass the technology to sanctioned parties. China Telecom is a prime example of a sanctioned entity where these chips should not be found.

Lava, an Israeli cybersecurity company, identified the hardware. The firm used Nvidia’s own DCGM Exporter tool to locate the GPUs. This software is designed for data center operators to monitor server health and performance. While intended for internal use, the tool can sometimes be accessed from outside the data center. Notably, it does not always require a password, which may have facilitated the discovery.

Nvidia has downplayed the significance of the find. A company spokesperson stated that the diversion of controlled products is less than one half of one percent in recent court cases. They described the issue as a drop in the bucket compared to China’s existing domestic compute capacity. The spokesperson insisted that with tens of millions of GPUs already in service in approved countries, smuggling remains a non-factor.

The persistence of these chips in China is not a new phenomenon. In 2025, reports indicated that Chinese companies smuggled $1 billion worth of Nvidia AI chips in just three months. At that time, the B200 was the most sought-after model. However, distributors were already preparing to move B300-series chips as soon as they became available. This latest finding suggests the flow of controlled hardware has not stopped.

The exact path the B300 chips took to reach China Telecom’s server racks remains unknown. Lava confirmed the chips are present but could not pinpoint their specific location within the network. Nvidia is working on a new tool to help locate its chips, but it has not been released yet. Until then, standard monitoring tools like the DCGM Exporter remain a primary method for detection.

The B300 is one of the most powerful data center GPUs on the market. Announced in March of last year, it offers significant performance gains over its predecessor. It features 50% more memory and FP4 compute capability than the previous-generation B200. Nvidia marketed the chip as built for the age of reasoning, citing its utility for sophisticated large language models like DeepSeek R1.

The high value of these chips has fueled a complex smuggling ecosystem. In August of this year, nine individuals were indicted in Taiwan for the illegal export of B300 GPUs to China. This happened days after Supermicro confirmed it fired several employees following an internal investigation. The smuggling scheme involved a Taiwanese server trading firm with whitelisted status. The intricate process highlights the difficulty in enforcing export controls.

Demand for Nvidia silicon continues to drive up prices for older hardware. A100 servers, which are five years old, have seen their prices triple. These units can now cost up to $82,000. Some organizations have even resorted to retooling gaming GPUs to run AI workloads. The ongoing crackdown on chip smuggling shows no sign of slowing, even as new, more powerful models enter the market.