32 Restricted AI Chips Traced to China
Security researchers identified prohibited processors inside a major Chinese network while the manufacturer disputes the scale of such breaches.
By Ama Boateng ·
Thirty-two restricted Nvidia Blackwell Ultra B300 processors have been detected inside the network of China Telecom, a state-owned telecommunications provider. Israeli security firm Lava located the hardware, an action that highlights the ongoing difficulty of enforcing export controls on high-performance computing components.
The identification of these specific units raises questions regarding their supply chain. Under current regulations, these processors are subject to strict export prohibitions, permitting sale only to approved buyers who guarantee they will not redistribute the items to sanctioned nations, including China. Despite these rules, the processors were located within a Chinese data center, a situation that contradicts the intended restrictions.
The method used to verify the presence of these processors involves Nvidia's own software. Lava identified the chips through the DCGM Exporter tool, a utility designed for data center operators to monitor server health and performance. While intended for internal use, the software can be accessed externally, and it does not consistently require password authentication. Nvidia has previously indicated that it is developing a tool to facilitate the location of its chips, but that software has not yet been released.
Nvidia has responded to the findings by emphasizing the scale of its authorized operations compared to illicit ones. A spokesperson for the company characterized the diversion of controlled products as insignificant, noting that recent court cases have involved diversion of less than one half of one percent. The spokesperson described the incident as a "drop in the bucket" compared to the volume of domestic computing capacity China already possesses, stating, "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 B300 chip, announced in March of last year, is a highly sought-after component. The data center GPU offers 50% more memory and FP4 compute performance than the preceding B200 model. At the time of its announcement, Nvidia stated the chip was "built for the age of reasoning," referencing advanced large language models such as DeepSeek R1. The B300 was expected to ship by the end of 2025, and it quickly became a target for unauthorized export.
The illicit movement of these components has attracted law enforcement attention. In August 2026, nine individuals were indicted in Taiwan concerning the illegal export of B300 GPUs to China. This action followed a Supermicro investigation into smuggling that resulted in the termination of several employees. The smuggling operation reportedly involved Flying Tiget Tech, a Taiwanese server trading firm that holds whitelisted status for GPU purchases.
The demand for Nvidia hardware remains intense, impacting pricing even for older generations of silicon. The company's A100 servers, despite being five years old, have tripled in price and can cost up to $82,000. The enforcement of export controls has also led some parties to retool gaming GPUs for use in AI workloads where possible.
Source: Tom's Hardware
