Illegal Nvidia chips found in China Telecom network

Illegal Nvidia Blackwell Ultra B300 graphics cards have been discovered in the network of China Telecom, a government-controlled operator in China. These chips are prohibited from being exported to China, yet 32 of them have been identified on the company’s network.

How were the chips detected?

An Israeli cybersecurity company called Lava identified the chips using DCGM Exporter, an Nvidia tool used in data centers to monitor chip conditions. Some of these tools expose information online without any password, allowing Lava to trace the exact model and identifiers of the equipment on China Telecom’s network.

What is the Blackwell Ultra B300 chip?

The Nvidia Blackwell Ultra B300 is a high-performance graphics card designed for training and running large AI models. It has 50% more memory than its predecessor, the B200, and supports heavy computations. The United States has banned its export to China to prevent the country from accessing cutting-edge AI technology.

China Telecom's role in the digital infrastructure

China Telecom is a state-owned enterprise that plays a central role in China’s digital infrastructure. In June 2026, Beijing planned to invest about 2,000 billion yuan (268 billion euros) to develop data centers, with China Telecom and China Mobile expected to operate much of this new capacity.

Smuggling and high prices fuel the black market

The Blackwell Ultra B300 chips are circulating through clandestine channels. Last August, a Taiwanese court indicted nine people for involvement in a case with servers containing these chips. Some have reached China via Japan, Indonesia, and Hong Kong. A server with eight of these chips costs nearly 7 million yuan (940,000 euros) in China, nearly double its price in the United States, creating a profitable black market.

Nvidia downplays the issue

Nvidia has downplayed the issue, stating that such diversions represent "less than half a percent" of its overall sales and calls it a "drop in the bucket." The company argues that the number of chips involved in legal cases is small compared to the total in circulation, though the involvement of a state-backed company adds sensitivity to the situation.

Nvidia's dominance in China's AI chip market

Nvidia holds a 34% share of the Chinese market for data center chips used in AI. Despite Huawei's progress, Chinese developers still prefer Nvidia’s chips for training advanced models. Recently, companies like ByteDance, Alibaba, and Tencent ordered over 3 million RTX PRO 5500 cards from Nvidia, valued at more than 233 billion yuan (31.3 billion euros). These are less powerful than the Blackwell Ultra B300 but are a legal alternative.