China Telecom Network Hosts 32 US-Restricted Nvidia Processors

Lava, an Israeli security company, identified 32 Nvidia Blackwell Ultra B300 chips operating within the network of China Telecom. The state-owned telecommunications provider hosts the hardware despite U.S. export controls that restrict the sale of this chip class to the country. The discovery, first reported by The Information, highlights the difficulty of tracking high-value processors after they leave the supply chain.

Current export rules limit sales of these chips to whitelisted buyers who agree not to pass them to sanctioned parties. Enforcement has been challenging. 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 then, distributors were already preparing to handle B300-series parts.

Lava detected the chips using Nvidia's DCGM Exporter, a software tool intended for internal monitoring of server health. The tool is often accessible from outside the data center network and does not always require a password. Lava did not specify the exact location of the chips within China Telecom's infrastructure. Nvidia is developing its own tool to locate its chips, but that software has not yet been released.

Nvidia did not dispute the findings but minimized their impact. A company spokesperson stated that recent court cases show "insignificant diversion of controlled US products, less than one half of one percent." The spokesperson argued that with tens of millions of GPUs in service globally, the report "demonstrates that smuggling is a nonfactor, blocked by governments on both sides of the globe."

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

Enforcement actions have increased recently. In August 2026, nine people in Taiwan were indicted for illegally exporting B300 GPUs to China. This followed Supermicro firing several employees after an investigation into smuggling. The scheme involved a Taiwanese server trading firm called Flying Tiget Tech, which held whitelisted status for GPU purchases.

Demand for Nvidia silicon has driven up prices across the market. Servers built around the five-year-old A100 chip have tripled in cost. Some buyers have reportedly retooling gaming GPUs to run AI workloads amid the continuing crackdown on smuggling.