Alibaba Bans Anthropic’s Claude Code for Employee Use

Post by : Bianca Haleem

Chinese technology company Alibaba has instructed its employees to stop using Anthropic’s AI coding assistant, Claude Code, for work purposes, according to a person familiar with the decision.

The source said employees have instead been asked to use Alibaba’s own AI coding platform, Qoder. The individual was not authorised to speak publicly and requested anonymity.

Concerns Over China-Related User Identification

The decision follows increased attention on Claude Code after developers claimed the tool included features that inspect users’ environments, including timezone and proxy-related information. They also said the system inserted subtle markers into prompts sent back to Anthropic’s servers.

On Tuesday, an Anthropic employee wrote on X that these features were part of an experiment launched in March. According to the post, the purpose was to prevent account abuse by unauthorized resellers and protect the company’s AI models from distillation.

Anthropic Accuses Alibaba of AI Model Distillation

The latest development comes during a growing dispute between the two companies over artificial intelligence technology.

Last month, Anthropic said it had been targeted by Alibaba in what it described as a "distillation" effort. The company alleged that Alibaba attempted to train a less capable AI model using outputs generated by Anthropic’s Claude AI models.

According to a letter Anthropic said the process could help speed up China’s ability to reach the advanced capabilities of its Mythos Preview AI model.

Alibaba has not publicly responded to these allegations.

Claude Code Remains Popular in China

Claude Code is Anthropic’s AI coding assistant designed for software developers. Despite Anthropic restricting access to users and organisations in China, the tool has gained popularity among programmers in the country.

The source told Reuters that restrictions aimed at users in China are difficult to fully enforce because individuals can operate servers in the United States and route internet traffic to appear as though it originates there.

However, the source added that businesses are generally more cautious because of legal and compliance risks.

Chinese AI Firms Shift Toward Domestic Models

As U.S. AI companies continue trying to prevent unauthorised access, resale and model distillation, Chinese cloud computing and artificial intelligence companies are increasingly relying on domestic and open-source AI models.

These include DeepSeek, Alibaba’s Qwen, Moonshot and Zhipu.

At the same time, Chinese AI models are expanding into the U.S. market, a trend that has raised concerns among some experts in the American AI industry.