32 Restricted AI Chips Detected in State-Owned Chinese Network

Thirty-two Nvidia Blackwell Ultra B300 GPUs, a processor model restricted from sale to China under current U.S. export regulations, were discovered operating inside the infrastructure of China Telecom, a state-owned telecommunications carrier. Israeli security firm Lava identified the hardware within the company's network, according to a report by The Information. The discovery marks a fresh instance of advanced computing components appearing in a market where their sale is prohibited, as such high-performance chips are legally available only to whitelisted buyers who agree not to redistribute them to sanctioned entities.

While Nvidia has not denied the specific finding, the company has characterized the scale of such illicit trade as negligible relative to its overall global shipments. "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 drop in the bucket compared to the ocean of domestic compute China already has," an Nvidia spokesperson stated. The company reiterated that its primary customer base remains outside sanctioned regions, noting that tens of millions of its GPUs are currently in service across approved countries.

The method by which these specific units entered the network remains unclear. Lava located the processors by accessing Nvidia's own DCGM Exporter tool, a utility intended for data center operators to monitor server health. The firm noted that while designed for internal use, the software can often be accessed from outside a data center's network and, in some instances, does not require password authentication to view. Nvidia previously acknowledged it was developing a tool to allow for the precise locating of its chips, though that software has not yet been released.

The demand for the B300, announced in March of last year, remains intense due to its capabilities. The GPU features 50 percent more memory and FP4 compute performance than the preceding B200 generation and was marketed as "built for the age of reasoning" to support advanced AI models. Consequently, efforts to circumvent export controls continue. In August 2026, nine individuals were indicted in Taiwan over the illegal export of B300 units to China, while Supermicro recently terminated several employees following an internal investigation into smuggling operations.

The market for Nvidia silicon remains highly volatile. Due to persistent demand for AI data center components, even older hardware commands a premium price; servers using five-year-old A100 chips have tripled in cost and can reach up to $82,000. This scarcity has led some entities to repurpose consumer-grade gaming GPUs to perform AI workloads where possible.