China Telecom network contains illegal Nvidia Blackwell Ultra B300 GPUs: chip smuggling remains a non-factor according to Nvidia

Nvidia Blackwell Ultra B300 chips have been identified within China Telecom's network, despite being barred from export by U.S. regulations. The Information reports that these same chips were already subject to export restrictions, raising the question of how they ended up in a Chinese data center. Such chips can only be sold to approved buyers who agree not to export them to sanctioned parties, including China.

Banning companies from purchasing Nvidia's high-performance GPUs and AI data center chips has not always worked. In 2025, it was reported that Chinese companies smuggled $1 billion worth of Nvidia AI chips into the country in three months. At the time, the B200 chips were the most in demand, but some distributors were already preparing to sell B300-series chips when they became available.

The latest finding shows that the proliferation of export-controlled chips into China continues to be an issue. Nvidia has downplayed the report but did not deny the findings, stating that 'governments, researchers, and media have all found insignificant diversion of controlled US products,' which is 'a drop in the bucket' compared to the scale of domestic compute in China.

It remains unclear how the B300 chips reached China Telecom's server racks, and Lava has not yet confirmed their exact location within the company's network. The firm identified the chips via Nvidia's DCGM Exporter tool, which can be installed by data center operators and is used to monitor server health and performance. Although designed for internal use, it can often be accessed beyond the data center's network.

Nvidia's B300 chip is one of the most powerful on the planet, offering significant performance gains with 50% more memory and FP4 compute than its predecessor, the B200. Nvidia originally planned for the B300 to ship by the end of 2025, and it did not take long for it to become highly desired. In August 2026, nine people were indicted in Taiwan over the illegal export of B300 GPUs to China. This came just days after Supermicro confirmed that it had fired several employees following an investigation into smuggling.

The complicated smuggling process included the use of a Taiwanese server trading firm called Flying Tiget Tech, which has whitelisted status for GPU purchases. Nvidia's chips have proven so vital to AI data centers that demand for even its older silicon has caused skyrocketing prices. The company's A100 servers have tripled in price, despite being five years old, and can cost up to $82,000.

The ongoing crackdown on Nvidia chip smuggling has even seen some resort to retooling gaming GPUs to run AI workloads where possible. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, and reviews in your feeds. Get Tom's Hardware's best news and in-depth reviews, straight to your inbox.