32 Blackwell Chips Found in China Telecom

The U.S. export ban on high-performance graphics cards is facing a new test as security firm Lava claims it has located 32 Nvidia Blackwell Ultra B300 chips within the network of China Telecom. The state-owned telecommunications provider is now under the microscope after these specific processors, which are barred from export to China, were detected in its infrastructure. The discovery highlights a persistent gap between official trade restrictions and the physical reality of data centers in the region.

The B300 series is among the most powerful data center GPUs currently available, offering significant performance advantages over its predecessor. According to The Information, these chips are restricted to whitelisted buyers who agree not to sell them to sanctioned parties. Yet, the presence of 32 units in a Chinese data center suggests that the control mechanisms are being bypassed. This is not the first time such leaks have occurred, as reports from 2025 indicated that Chinese firms smuggled approximately $1 billion worth of Nvidia AI chips into the country in just three months.

Lava identified the chips using Nvidia’s own DCGM Exporter tool, a software utility designed for data center operators to monitor server health and performance. The tool is typically intended for internal use, but it can often be accessed from outside the immediate network. Complicating the security picture, the software does not always require password authentication. While it remains unclear exactly where within China Telecom’s vast network the chips are located, their presence is confirmed by the monitoring data.

Nvidia has responded to the findings with relative calm, choosing to downplay the incident rather than dispute the facts. A spokesperson noted that governments and researchers have found only insignificant diversion of controlled U.S. products in recent court cases, citing figures of less than one half of one percent. The company described the smuggling as a drop in the bucket compared to the massive 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 that is effectively blocked by governments on both sides.

The demand for these specific chips in China is driven by their superior capabilities. Announced in March of last year, the B300 offers 50% more memory and FP4 compute power than the previous-generation B200. It was marketed as being built for the age of reasoning, with particular relevance for sophisticated large language models. The chip became a hot commodity quickly, leading to complex smuggling schemes. In August of this year, nine people were indicted in Taiwan for illegally exporting B300 GPUs to China. The operation involved a whitelisted server trading firm and led to firings at Supermicro following an internal investigation.

The scarcity of newer chips has also driven up the price of older hardware. Nvidia’s A100 servers, which are five years old, have seen prices triple to as much as $82,000. This economic pressure has led some operators to retool gaming GPUs for AI workloads as a stopgap measure. The ongoing efforts to track these chips continue as Nvidia works on a dedicated tool to locate its hardware, which has not yet been released.

The situation underscores the complexity of managing global tech supply chains under strict regulatory frameworks. While Nvidia insists that the volume of smuggled chips is small relative to the total market, the detection of 32 B300 units in a state-owned network serves as a tangible reminder of the challenges in enforcement. The next steps will likely involve further investigation into how the chips entered the system and whether additional hardware is present in other locations.