US export rules bucked as 32 Nvidia B300s power Chinese state network

Israeli security firm Lava identified 32 Nvidia Blackwell Ultra B300 chips operating within the infrastructure of China Telecom, a state-owned telecommunications provider. The detection, first reported by The Information, reveals that hardware barred from the country by U.S. export controls is currently active in a major Chinese data center.

Current regulations restrict the sale of this class of chip to whitelisted buyers who agree not to transfer them to sanctioned parties. Enforcing these limits has proven difficult. A 2025 report indicated that Chinese companies smuggled $1 billion worth of Nvidia AI chips over a three-month period. While B200 processors were the primary target at that time, distributors had already begun preparing for the B300 series.

Nvidia acknowledged the findings but minimized their impact. A spokesperson told Tom's Hardware that recent court cases show "insignificant diversion of controlled US products, less than one half of one percent." The spokesperson argued that with tens of millions of GPUs in service in approved countries, the report "demonstrates that smuggling is a nonfactor, blocked by governments on both sides of the globe."

The specific path the chips took to reach China Telecom remains unclear. Lava detected the units using Nvidia's DCGM Exporter software, a monitoring tool intended for internal use that is often accessible from outside the network without a password. The firm could not determine the exact physical location of the chips within the company's facilities. Nvidia is developing a tool to locate its chips, but it has not yet been released.

The B300 offers 50% more memory and FP4 compute capability than the earlier B200. Nvidia announced the GPU in March 2025 and described it as "built for the age of reasoning." The chip became highly sought after, with some buyers retooling older gaming GPUs to run AI workloads amid the crackdown. Servers built around the five-year-old A100 have seen prices triple.

Enforcement efforts have intensified recently. In August 2026, nine individuals in Taiwan were indicted for the illegal export of B300 GPUs to China. The indictments followed an investigation by Supermicro, which fired several employees involved in the scheme. The network included Flying Tiget Tech, a Taiwanese server trading firm that held whitelisted status for GPU purchases.