Export Controls Bypassed: Restricted AI Chips Detected in Chinese Telecom Network
Security researchers found restricted Nvidia accelerators in China's state-owned telecom infrastructure, prompting Nvidia to minimize the impact of such diversions.
By Lauren Collins ·
Restricted hardware has surfaced where it should not be, inside a major Chinese state-owned telecommunications network.
Israeli security firm Lava has identified 32 Nvidia Blackwell Ultra B300 chips within the network of China Telecom. These specific accelerators are subject to strict U.S. export controls, which generally limit their sale to whitelisted buyers who agree not to re-export them to sanctioned destinations, including China. While the discovery highlights ongoing difficulties in enforcing export regulations, Nvidia has responded by downplaying the significance of such diversions.
Nvidia did not deny the existence of the chips in China Telecom's infrastructure but characterized the volume of unauthorized exports as negligible. A company spokesperson stated that governments, researchers, and media have found insignificant diversion of controlled U.S. products, citing figures of less than one half of one percent in recent court cases. The spokesperson described the issue as a "drop in the bucket compared to the ocean of domestic compute China already has," adding that with tens of millions of GPUs in service in approved countries, smuggling remains a nonfactor blocked by governments on both sides of the globe.
The method by which these specific B300 units entered China Telecom's server racks remains unclear, and Lava could not confirm their precise location within the company's network. However, the chips were detected using Nvidia's own DCGM Exporter tool. Although this software is intended for internal data center use to monitor server health and performance, it is often accessible beyond the network perimeter and does not always require password authentication. Nvidia has previously acknowledged working on a tool to locate its chips, but that solution has yet to be released.
The B300, announced in March of last year, remains one of the most powerful data center GPUs available. It offers substantial performance improvements over the previous generation, including 50% more memory and FP4 compute capabilities compared to the B200. Nvidia marketed the hardware as being built for the age of reasoning, specifically referencing advanced AI language models like DeepSeek R1. The chip began shipping by the end of 2025 and quickly became a target for unauthorized trade.
Attempts to move these specific processors out of authorized channels have drawn legal scrutiny. In August 2026, nine individuals were indicted in Taiwan regarding the illegal export of B300 GPUs to China. That action followed a Supermicro investigation into employee misconduct related to smuggling, which led to several firings. The smuggling operation reportedly involved Flying Tiget Tech, a Taiwanese server trading firm that held whitelisted status for GPU purchases.
The demand for high-performance computing has driven the market for Nvidia hardware to extreme levels, regardless of restrictions. Even older hardware is seeing price spikes; the company's five-year-old A100 servers have tripled in price and can cost up to $82,000. This shortage has forced some parties to retool gaming GPUs for AI workloads where possible.
The enforcement of export controls remains a focal point for U.S. authorities, though Nvidia maintains that such diversions are statistically minor compared to the total volume of chips deployed in approved nations. The presence of these accelerators in China Telecom's network underscores the continued difficulty in fully preventing the movement of controlled technology into restricted markets.
Source: Tom's Hardware
