Alibaba Group has prohibited its employees from using Anthropic’s Claude Code, an AI-powered coding assistant, following revelations that the tool contained hidden code designed to identify users from China. The ban, effective July 10, comes amid escalating tensions between the two companies over allegations of intellectual property theft, according to a report. The move highlights growing concerns about data privacy and the ethical use of AI tools in the global tech industry.
The discovery of the tracking mechanism was made by security researchers who analyzed the codebase of Claude Code, a product developed by San Francisco-based startup Anthropic. The hidden code, which was not disclosed in the tool’s public documentation, could have enabled the identification of users based on their geographic location, raising questions about user consent and transparency. Alibaba, one of China’s largest tech conglomerates, has not publicly commented on the specific findings but emphasized its commitment to cybersecurity and compliance with local regulations.
The Ban and Its Immediate Context
The restriction on Claude Code follows weeks of public disputes between Alibaba and Anthropic. In late June, Alibaba accused Anthropic of “industrial-scale distillation,” a process where one company extracts and replicates the capabilities of another’s AI models. Anthropic denied the allegations, stating that its technology was developed independently. The latest controversy adds a new layer of complexity to the rivalry, as it introduces legal and ethical questions about the use of AI tools in cross-border operations.
The hidden tracking code in Claude Code was identified through a third-party audit conducted by a cybersecurity firm. The code, which was embedded in the tool’s backend, could have allowed Anthropic to collect metadata about users, including IP addresses and device information. While the firm did not explicitly confirm that the code was activated, the presence of such functionality has prompted scrutiny from regulators and industry experts.
Alibaba’s decision to block the tool reflects its broader strategy to prioritize data sovereignty and user privacy. The company has faced increasing pressure from Chinese regulators to strengthen safeguards against foreign surveillance risks. In 2023, the Chinese government introduced new rules requiring tech firms to conduct regular security reviews of AI tools used by employees, a move that has led to similar restrictions on other international