Lava Finds 32 Nvidia B300 Chips Inside China Telecom

Israeli security company Lava has identified 32 Nvidia Blackwell Ultra B300 chips running within the network of China Telecom, a state-owned telecommunications provider. The discovery, first reported by The Information, highlights a gap in how U.S. export controls are enforced against Chinese data centers.

Under current regulations, chips of this class are restricted to whitelisted buyers who promise not to sell them to sanctioned parties. Despite these rules, a 2025 report indicated that Chinese firms smuggled $1 billion worth of Nvidia AI chips into the country over a three-month period. At that time, B200 processors were the most desired, but distributors were already preparing to handle the newer B300 series.

Nvidia did not challenge Lava's count but minimized the impact of the find. A spokesperson told Tom's Hardware that the diversion represents less than half of one percent of controlled products in recent legal cases. The company argued that with tens of millions of GPUs in approved countries, this instance is a drop in the ocean compared to the domestic compute capacity China already possesses.

The exact path these chips took to reach China Telecom is currently unknown. Lava also cannot pinpoint their specific location within the network. The firm detected the hardware using Nvidia's DCGM Exporter, a tool designed for internal server health monitoring. This software can often be accessed from outside the data center and frequently lacks password protection. Nvidia has confirmed it is building a tool to locate its own chips, but that software has not yet been released.

The B300 was announced in March 2025 and offers 50 percent more memory and FP4 compute power than the previous B200 model. Nvidia described the chip as built for the age of reasoning, citing its suitability for large language models like DeepSeek R1. The processor was expected to ship by the end of 2025 and quickly became a target for buyers seeking high-performance AI capabilities.

Recent enforcement actions have targeted the smuggling route. In August 2026, nine individuals were indicted in Taiwan for illegally exporting B300 GPUs to China. These indictments followed an internal investigation at Supermicro, which fired several employees. The scheme involved a Taiwanese server trader named Flying Tiget Tech, which held the necessary whitelisted status for GPU purchases.

High demand for Nvidia silicon has driven up prices across the market, including for older hardware. Servers based on the five-year-old A100 chip have seen their prices triple. As the crackdown continues, some buyers have reportedly modified gaming GPUs to handle AI workloads.