32 restricted Nvidia chips found running in China Telecom servers

Lava, an Israeli security company, says it found 32 Nvidia B300 chips working inside China Telecom’s network.

The discovery suggests that hardware barred from China by U.S. export rules ended up in a state-owned data center. The finding was first reported by The Information and raises questions about how the parts moved across borders despite strict regulations.

Lava detected the chips using Nvidia’s DCGM Exporter software. This tool helps data center operators monitor server health and performance. Although it is designed for internal use, the software can often be accessed from outside the network without a password. Nvidia has acknowledged that the chips are likely in the network but says the discovery is minor.

A Nvidia spokesperson told Tom's Hardware that the diversion is insignificant. The spokesperson claimed that less than half of one percent of controlled U.S. products are diverted in recent court cases. They added that with tens of millions of GPUs in service in approved countries, smuggling is a nonfactor because governments on both sides of the globe block it.

The B300 chip is highly sought after because it offers 50% more memory and FP4 compute power than the previous B200 model. Nvidia announced the data center GPU in March 2025 and described it as built for the age of reasoning. The hardware was expected to ship by the end of 2025 and quickly became a target for buyers looking to upgrade their AI capabilities.

Enforcement efforts have intensified as demand for Nvidia silicon rises. In August 2026, nine people were indicted in Taiwan for illegally exporting B300 GPUs to China. These indictments came days after Supermicro fired several employees following an investigation into smuggling activities. The scheme involved a Taiwanese server trading firm called Flying Tiget Tech, which held whitelisted status for purchasing GPUs.

The price of servers built around the five-year-old A100 chip has tripled due to high demand. Some buyers have started retooling gaming GPUs to run AI workloads while they wait for new hardware. A 2025 report noted that Chinese companies smuggled $1 billion worth of Nvidia AI chips over three months. B200 processors were the most sought at that time, but distributors were already preparing for the B300 series.

China Telecom is the state-owned provider of telecommunications services in China. The current export rules allow this class of chips to be sold only to whitelisted buyers who agree not to pass them to sanctioned parties. Lava could not determine exactly where in the network the chips are located. Nvidia is developing a tool to help locate its chips but has not released the software yet.