Restricted Nvidia Processors Surface in China Telecom Network

Advanced computing hardware that U.S. policy aims to keep out of China has been located inside the network of a major state-owned telecommunications provider. Israeli security firm Lava identified 32 Nvidia Blackwell Ultra B300 chips operating within China Telecom's systems, a discovery that highlights the persistent difficulty of enforcing export controls on high-performance technology.

This matter is significant because such powerful processors are restricted from sale to buyers who do not agree to keep them away from sanctioned entities, including those in China. The presence of these specific units in a domestic network contradicts those regulations. Lava located the hardware using Nvidia's DCGM Exporter software, a tool meant to monitor server health but which can sometimes be reached from outside a data center's network. In some instances, this access does not require a password.

The source of these specific processors remains unknown. Lava cannot pinpoint the exact location of the chips within China Telecom's infrastructure, and it is unclear how they entered the country. The B300 model, announced in March 2025, is among the most capable accelerators available, offering significant performance gains with 50 percent more memory and FP4 compute compared to the previous generation. Nvidia stated at the time that it was "built for the age of reasoning."

The proliferation of these chips is not an isolated event. In 2025, it was reported that Chinese companies smuggled $1 billion worth of Nvidia AI chips into the country over three months. More recently, nine people were indicted in Taiwan in August 2026 regarding the illegal export of B300 GPUs. This action followed an investigation by Supermicro, which fired several employees over suspected smuggling.

Nvidia responded to the latest finding without disputing its accuracy, but characterized the issue as statistically insignificant. "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 spokesperson for the company stated, describing it as "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, "this report again demonstrates that smuggling is a nonfactor, blocked by governments on both sides of the globe."

The desire for such powerful hardware underscores its value. Because of high demand for AI data center components, prices for even older technology have surged. Servers using five-year-old A100 chips have tripled in price and can cost up to $82,000. The ongoing restrictions have also led some to attempt retooling gaming GPUs for AI workloads where possible.