Israeli Firm Finds 32 Blackwell Ultra Chips in China Telecom Network
Security researchers uncovered restricted Nvidia hardware in a state-owned Chinese carrier, prompting the chipmaker to argue that such leaks are a minor part of the broader market.
By Mei Lin ·
A security firm from Israel has identified 32 units of Nvidia's restricted Blackwell Ultra B300 graphics processors operating inside the infrastructure of China Telecom, a state-owned telecommunications provider. The discovery highlights the persistent challenge of enforcing U.S. export controls on high-performance artificial intelligence hardware bound for the Chinese market.
The chips were located by Lava, the security company, which utilized Nvidia's own DCGM Exporter tool to detect the hardware. This software is typically installed by data center operators to monitor server health and performance. Although designed for internal use, the tool can sometimes be accessed from outside the immediate network. Lava noted that the system does not always require password authentication, which may have facilitated the identification of the components.
The presence of these specific chips is significant because U.S. export regulations have barred their sale to China. Nvidia restricts the sale of these high-performance GPUs to whitelisted buyers who agree not to export them to sanctioned parties. The B300 series, announced in March of last year, offers substantial performance improvements over its predecessor, the B200. Specifically, the new chip features 50% more memory and double the FP4 compute capability, making it a prime target for data centers seeking to power advanced reasoning models.
Nvidia responded to the findings by downplaying their impact on the broader market. A company spokesperson stated that governments, researchers, and media outlets have found only insignificant diversion of controlled U.S. products in recent years. The spokesperson described these instances as a drop in the bucket compared to the massive amount of domestic compute power China already possesses, noting that tens of millions of GPUs are currently in service in approved countries.
It remains unclear how the B300 chips entered the server racks of China Telecom, nor can Lava confirm the exact location of the hardware within the network. However, the discovery adds to a growing pattern of restricted chips appearing in Chinese facilities. In 2025, reports indicated that Chinese companies smuggled approximately $1 billion worth of Nvidia AI chips into the country over a three-month period. At that time, the B200 was the most sought-after model, but distributors were already preparing for the arrival of the B300 series.
The difficulty in stopping the flow of these chips was highlighted in August 2026 when nine individuals were indicted in Taiwan for the illegal export of B300 GPUs. This legal action followed an investigation by Supermicro, which confirmed it had fired several employees involved in the smuggling process. The operation reportedly used a Taiwanese server trading firm with whitelisted status for GPU purchases to move the hardware across borders.
The demand for Nvidia hardware has driven up prices for older models as well. Servers equipped with the A100, a chip that is now five years old, have seen their prices triple, with some units reaching costs as high as $82,000. This scarcity and high value have led some operators to retool gaming graphics cards to handle AI workloads when possible, further illustrating the critical role these processors play in the current technology landscape.
Source: Tom's Hardware
