32 Banned Blackwell Ultra Chips Spotted in Chinese Telecom Network
Israeli security firm Lava identified 32 prohibited Nvidia GPUs inside China Telecom's infrastructure, prompting Nvidia to dismiss the finding as a minor anomaly in a vast market.
By Ana Castro ·
Lava, an Israeli cybersecurity company, has uncovered 32 Nvidia Blackwell Ultra B300 chips operating within the network of China Telecom. This state-owned telecommunications provider serves the domestic market, making the presence of these specific processors a notable find. The B300 is a high-performance data center GPU that U.S. export controls have barred from leaving the country. Typically, these chips are only sold to approved buyers who agree not to resell them to sanctioned entities, including those in China. Their discovery in a Chinese data center raises immediate questions about how they bypassed such strict regulations.
Nvidia has responded to the report by downplaying its significance, although the company did not deny the findings. A spokesperson stated that recent court cases show the diversion of controlled products is less than half of one percent. They described this volume 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 argued that smuggling remains a non-factor and is effectively blocked by governments on both sides of the Pacific.
The specific mechanism for how these 32 chips entered China Telecom's server racks remains unclear. Lava could not pinpoint the exact location within the network but confirmed their presence using Nvidia's DCGM Exporter tool. This software is designed for internal use by data center operators to monitor server health and performance. However, it is not always protected by password authentication and can sometimes be accessed from outside the local network. Nvidia has acknowledged working on a new tool to help locate its chips, but that utility has not yet been released.
The B300 is highly sought after because it offers significant performance advantages over its predecessor, the B200. Announced in March 2025, the new chip provides 50 percent more memory and FP4 compute capability. Nvidia marketed the hardware as built for the age of reasoning, citing advanced large language models like DeepSeek R1. The chip was expected to ship by the end of 2025 and quickly became a target for illicit trade. In August 2026, nine individuals in Taiwan were indicted for illegally exporting B300 GPUs to China. This followed an investigation by Supermicro, which fired several employees linked to the smuggling operation. The scheme utilized a Taiwanese server trading firm with whitelisted status to facilitate the transfers.
The demand for Nvidia silicon has driven prices for older models to record highs. A100 servers, which are five years old, have tripled in price and can now cost up to $82,000. The intense pressure to secure these chips has led some operators to retool gaming GPUs to handle AI workloads. This trend highlights the critical role these processors play in modern data centers. While the discovery of 32 specific units is a small number, it underscores the ongoing challenge of enforcing export controls in a global market.
The situation illustrates the complex web of international trade and technology enforcement. As AI workloads grow, the incentive to acquire top-tier hardware remains strong. For now, the presence of these chips in China Telecom's infrastructure serves as a concrete example of the gaps in the current export control system. It remains to be seen whether this incident will lead to stricter enforcement or new technical solutions to track Nvidia hardware more effectively in the coming months.
