Alibaba is blocking its employees from using Anthropic’s AI tools for work starting July 10, citing security risks from the U.S. company. The Chinese e-commerce giant has placed Anthropic’s Claude Code on a high-risk software list, according to people familiar with the matter. The move follows Anthropic’s June letter to a U.S. Senate committee accusing Alibaba of orchestrating what it called the largest known “distillation attack” to date—an attempt to illicitly extract its AI capabilities.

Anthropic’s terms already bar Chinese companies and other “adversarial nations” from using its models. Alibaba now requires staff to uninstall all Anthropic products and switch to its own AI assistant, Qoder. Neither Alibaba nor Anthropic commented on the record. The ban comes amid online backlash in China after posts on Reddit and GitHub revealed hidden code in Anthropic’s tools designed to detect users based in the country.

The Financial Times reported that Anthropic is closing loopholes that let Chinese firms access Claude through third countries. Chinese fintech group Ant allegedly gave employees corporate Claude accounts routed through its Singapore-based entity. ByteDance, TikTok’s parent, does not facilitate direct access but started a reimbursement program in April allowing engineers to expense personal Claude subscriptions via VPNs. A ByteDance insider said the policy aims to let staff “experience and learn” a wider range of AI products. Ant and ByteDance declined to comment.

Source: CNBC