Chip Smuggling: Blackwell Ultra B300 GPUs Discovered in China Telecom Network

Israeli security firm Lava has identified thirty-two Nvidia Blackwell Ultra B300 graphics processing units within the network of China Telecom, a state-owned telecommunications provider. The discovery is significant because these specific chips have been barred from export to the country by U.S. trade regulations. The presence of the hardware raises questions about the efficacy of current export controls and the mechanisms used to move advanced silicon into restricted markets.

The findings were reported by The Information, which highlights the logistical challenges of enforcing restrictions on high-performance computing hardware. Under current rules, these chips can only be sold to whitelisted buyers who agree not to resell them to sanctioned parties, including entities in China. The identification of the B300 units in a major Chinese state-owned network suggests that these agreements may be being circumvented through complex supply chain channels.

According to Nvidia, the volume of smuggled chips remains a minor issue relative to the total compute resources available in China. An Nvidia spokesperson stated that recent court cases have found the diversion of controlled U.S. products to be less than half of one percent of the total. The company described this leakage as a drop in the bucket compared to the vast ocean of domestic compute China already possesses, noting that tens of millions of GPUs are currently in service in approved countries.

Lava confirmed the presence of the chips using Nvidia’s own Data Center GPU Manager (DCGM) Exporter tool. This software is typically installed by data center operators to monitor server health and performance. Although designed for internal use, the tool can often be accessed from outside the data center’s network and, in some instances, does not require password authentication. It is currently unknown how the chips were transported into the server racks or their exact physical location within the company's infrastructure.

The Blackwell Ultra B300, announced in March of the previous year, is one of the most powerful data center GPUs available. It offers substantial performance improvements over the preceding B200 generation, including fifty percent more memory and enhanced FP4 compute capabilities. Nvidia marketed the chip as built for the age of reasoning, specifically citing its utility for sophisticated large language models. The chip was originally expected to ship by the end of 2025 and quickly became a high-demand asset.

The smuggling of these high-value chips has become a complex operation involving multiple jurisdictions. In August 2026, nine individuals were indicted in Taiwan regarding the illegal export of B300 GPUs to China. This legal action followed an investigation by Supermicro, which resulted in the termination of several employees. The smuggling network reportedly utilized a Taiwanese server trading firm, Flying Tiget Tech, which held whitelisted status for purchasing the GPUs.

The high demand for Nvidia hardware has driven up the prices of even older models. A100 servers, which are five years old, have seen their prices triple and can now cost up to $82,000. The intense scrutiny on smuggling routes has also led some organizations to retool gaming GPUs for artificial intelligence workloads. These developments underscore the critical importance of Nvidia’s chips to the global AI infrastructure and the ongoing efforts to manage their distribution across international borders.