Nvidia Finds 32 Banned Blackwell Ultra Chips in China Telecom Network
Security researchers discovered 32 prohibited Nvidia B300 GPUs inside a major Chinese state-owned carrier, prompting Nvidia to call the leak negligible against the backdrop of its massive global install base.
By Petra Murphy ·
Thirty-two Nvidia Blackwell Ultra B300 graphics processing units have been identified within the infrastructure of China Telecom, a major state-owned telecommunications provider in China. The discovery was made by Lava, an Israeli cybersecurity firm, which flagged the presence of these specific chips despite U.S. export controls that generally prohibit their sale to the region. The finding raises significant questions about how high-performance hardware intended for whitelisted buyers ended up in a Chinese data center, highlighting the persistent challenge of tracking controlled technology across borders.
Lava located the hardware using Nvidia's DCGM Exporter tool, a software utility designed for data center operators to monitor server health and performance. Although the tool is typically for internal use, it can sometimes be accessed from outside the immediate network and does not always require password authentication. While the researchers confirmed the chips are present, they could not determine the exact location within China Telecom's network or the specific method used to smuggle them in. Nvidia has previously acknowledged that it is developing a more robust tool to help locate its chips, but that solution has not yet been released.
The B300 series is among the most powerful data center GPUs currently available, having been announced in March of last year. The chip offers substantial performance improvements over its predecessor, the B200, including 50% more memory and increased FP4 compute capabilities. At launch, Nvidia described the hardware as built for the age of reasoning, specifically referencing advanced large language models like DeepSeek R1. The chip was originally expected to ship by the end of 2025, and it quickly became a highly sought-after asset in the global AI market.
Smuggling of Nvidia's high-end chips into China is not a new phenomenon. In 2025, reports indicated that Chinese companies smuggled approximately $1 billion worth of Nvidia AI chips into the country over a three-month period. While the B200 was the primary target at that time, distributors were already positioning themselves to sell the newer B300 series once it became available. The recent indictment of nine individuals in Taiwan over the illegal export of B300 GPUs in August 2026 further illustrates the complexity of the supply chain. Those indictments followed an investigation by Supermicro, which fired several employees after discovering that a whitelisted trading firm called Flying Tiget Tech had been used to facilitate the smuggling.
Nvidia has downplayed the impact of the latest discovery, stating that the diversion of controlled products remains a small fraction of the total market. A company spokesperson noted that recent court cases have found the diversion of U.S. products to be less than half of one percent. The spokesperson described this volume as a drop in the bucket compared to the vast amount of domestic compute capacity China already possesses. With tens of millions of GPUs in service in approved countries, Nvidia maintains that smuggling remains a non-factor, largely because it is blocked by governments on both sides of the Pacific.
The high demand for Nvidia silicon has created a secondary market where even older hardware commands premium prices. The company's A100 servers, which are five years old, have seen their prices triple and can now cost up to $82,000. This scarcity has led some organizations to retool gaming GPUs to handle AI workloads when possible. As the global competition for computing power intensifies, the ability to track and control the flow of advanced chips remains a critical issue for policymakers and technology companies alike.
Looking ahead, the situation is likely to remain fluid as both U.S. and Chinese authorities continue to tighten their controls. Nvidia is working on new tools to assist in tracking its hardware, which may provide better visibility into where specific chips are deployed. However, until those tools are released and widely adopted, the risk of diversion through third-party distributors and whitelisted firms will likely persist. The incident involving China Telecom serves as a reminder that export controls are only as strong as the monitoring systems used to enforce them.
