Lava Detects 32 Restricted Nvidia Chips in China Telecom Network

Israeli security firm Lava discovered 32 Nvidia Blackwell Ultra B300 chips operating within the network of China Telecom. The state-owned telecommunications provider hosts these processors despite U.S. export controls that generally bar the hardware from entering the country. The finding, first reported by The Information, raises immediate questions about how the chips bypassed existing trade restrictions.

Under current regulations, this class of chip is restricted to whitelisted buyers who agree not to resell to sanctioned parties. Enforcement has historically been difficult. A 2025 report indicated that Chinese companies smuggled $1 billion worth of Nvidia AI chips in a three-month period. At that time, B200 processors were the primary target, but distributors were already preparing for the B300 series.

Nvidia did not dispute the physical presence of the chips but questioned their impact. A spokesperson told Tom's Hardware that recent court cases show "insignificant diversion of controlled US products," estimating the volume at less than half of one percent. The company argued that with tens of millions of GPUs in approved countries, the discovery demonstrates that "smuggling is a nonfactor." The firm also noted that China possesses a vast existing domestic compute infrastructure.

Lava used Nvidia's DCGM Exporter software to locate the hardware. This tool is designed for data center operators to monitor server health but can often be accessed from outside the network without a password. Lava could not determine the exact location of the chips within China Telecom's infrastructure. Nvidia has confirmed it is developing a tracking tool to locate its chips, though that software has not yet been released.

The B300 chip, announced in March 2025, offers 50 percent more memory and FP4 compute capacity than the previous B200 model. Nvidia positioned the product for advanced large language models like DeepSeek R1. The hardware was expected to ship by the end of 2025 and became highly sought after in the market.

Enforcement actions have intensified in recent months. In August 2026, authorities in Taiwan indicted nine people for illegally exporting B300 GPUs to China. These indictments followed days after Supermicro fired several employees involved in a smuggling investigation. The scheme involved a Taiwanese server trading firm called Flying Tiget Tech, which held whitelisted status for GPU purchases.

Market dynamics continue to shift under the pressure of the crackdown. Prices for servers built around the five-year-old A100 have tripled. Some buyers have reportedly begun retooling gaming GPUs to run AI workloads as they seek alternatives to restricted hardware.