Chinese technology giant Alibaba has reportedly banned employees from using Anthropic’s Claude Code at work, marking the latest escalation in a growing dispute between the two companies over artificial intelligence and model security.
According to a person familiar with the decision, Alibaba has instructed staff to switch to its in-house AI coding platform, Qoder, after Claude Code came under scrutiny for features that could help identify users linked to China.
The move comes amid an intensifying AI rivalry between the United States and China.
Anthropic Alleges AI Model Distillation
Last month, Anthropic accused Alibaba of attempting to extract the capabilities of its Claude AI models through a technique known as AI distillation training a smaller model using the outputs of a more advanced one.
In a letter sent to two US senators and reviewed by Reuters, Anthropic claimed such efforts could accelerate China’s progress towards replicating the capabilities of its advanced Mythos Preview model.
Alibaba has not publicly responded to the allegations.
Why Claude Code Came Under Scrutiny
Claude Code, Anthropic’s AI assistant for software developers, remains popular among Chinese programmers despite official restrictions on access in China.
Developers recently claimed the tool included mechanisms that inspected user environments—such as time zones and proxy settings and embedded markers into prompts sent back to Anthropic’s servers.
An Anthropic employee later said on X that the feature had been introduced as an experiment in March to combat unauthorised account resellers and protect the company’s models from distillation attempts.
China’s AI Ecosystem Turns Inward
The person familiar with Alibaba’s decision said individual users can still bypass many of Anthropic’s regional restrictions by routing traffic through overseas servers, but companies face greater legal and compliance risks.
As US AI firms tighten controls over access to their models, Chinese companies are increasingly relying on domestic alternatives such as Qwen, DeepSeek, Moonshot and Zhipu.
At the same time, the growing international adoption of Chinese AI models has raised concerns among some US industry experts, underscoring the intensifying technological competition between the world’s two largest economies.
(with inputs from Reuters)
