Nvidia's Banned B300 Chips Turned Up Inside China Telecom's Network, and Nvidia Calls It a Drop in the Bucket

Some of the most powerful AI chips on the planet, the ones Washington has gone to great lengths to keep out of China, are running inside the network of China's state owned telecom giant. Lava, an Israeli security firm, says it identified 32 Nvidia Blackwell Ultra B300 chips within China Telecom's network, a finding first reported by The Information.

Nobody knows how they got there. Nvidia did not deny the finding. It just shrugged.

Found with Nvidia's own software

The B300 is barred from export to China under US export controls. It can only be sold to whitelisted buyers who agree not to pass the chips on to sanctioned parties, including those in China. Yet here they are, inside a company owned by the Chinese state.

The way Lava found them is almost as awkward for Nvidia as the discovery itself. The firm spotted the chips through DCGM Exporter, Nvidia's own monitoring tool that data center operators install to keep tabs on server health and performance. It is meant for internal use, but it can often be reached from outside a data center's network, and it does not always ask for a password.

There are limits to what Lava can say. It cannot confirm exactly where in China Telecom's network the chips physically sit, and how they arrived there remains unknown.

Meanwhile, the tool that could settle questions like this still does not exist. Nvidia has previously confirmed it was working on software that would let its chips be located. It has not been released.

"A drop in the bucket"

Nvidia downplayed the report without disputing it. "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 spokesperson told Tom's Hardware. The company called that "a drop in the bucket compared to the ocean of domestic compute China already has."

The spokesperson went further: "With tens of millions of GPUs in service in approved countries, this report again demonstrates that smuggling is a nonfactor, blocked by governments on both sides of the globe."

The argument sits uneasily next to a track record of chips leaking through the cracks. In 2025, Chinese companies were reported to have smuggled $1 billion worth of Nvidia AI chips into China in just three months. The B200 was the hottest item then, and some distributors were already gearing up to sell B300s.

A chip built for reasoning

Nvidia announced the B300 in March 2025, pitching it as "built for the age of reasoning." It packs 50% more memory and FP4 compute than the B200, which makes it exactly the kind of hardware export controls were written to stop.

And the enforcement record keeps growing. In August 2026, nine people were indicted in Taiwan over the illegal export of B300 GPUs to China, days after Supermicro confirmed it had fired several employees following a smuggling investigation. That scheme ran through a Taiwanese server trading firm that held whitelisted status for GPU purchases, the very status meant to keep the chips in safe hands. Taiwan has since been moving to criminalize AI chip smuggling to China outright.

Washington's strategy against China's AI ambitions rests heavily on controlling who gets these chips. The China Telecom finding is a small number, 32 processors. Nvidia says that is the point. The other point is that they were found at all, inside a state company, through a monitoring tool left reachable from outside.

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