Alibaba to Ban Use of Anthropic’s Claude Code by Employees Amid AI Dispute

By: Harsh Vardhan

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Updated on: 06-Jul-2026 07:00 PM

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Alibaba has reportedly instructed employees to stop using Anthropic's Claude Code for work. This move highlights the ongoing competition between Chinese and US artificial intelligence companies. The decision follows disputes over AI model training practices and concerns about Claude Code's features that detect users from restricted regions.

Key Highlights

• Alibaba will ban employees from using Anthropic's Claude Code due to security concerns.
• Employees are directed to use Alibaba's in-house AI coding assistant Qoder instead.
• Anthropic and Alibaba are in dispute over AI model distillation practices.
• Microsoft is also reducing use of Claude Code, shifting to GitHub Copilot CLI.

Alibaba Labels Claude Code High-Risk

According to Reuters, Alibaba has classified Claude Code as "high-risk software" and plans to prohibit its use by employees at work. Instead, staff are being directed to use Alibaba's own AI coding assistant, Qoder. The company has not made any public statements about this reported policy, and Anthropic has not commented on the workplace ban.

Sources familiar with the matter told Reuters that the decision comes after scrutiny over Claude Code's built-in mechanisms. Developers reported that the assistant checks user details such as time zones and proxy information before sending prompts to Anthropic's servers. These findings led to discussions online, especially among Chinese users, since Anthropic restricts access to its AI services in China.

Anthropic engineer Thariq Shihipar stated on X that the feature was "an experiment we launched in March." He explained it was designed to prevent account abuse by unauthorized resellers and to protect the company's models from distillation attempts.

Workplace Ban and Industry Response

Morningstar reported that Alibaba will enforce the ban on Claude Code from July 10. Employees must switch to the in-house coding platform, Qoder. This workplace ban comes amid rising tensions between Alibaba and Anthropic.

Last month, Anthropic accused Alibaba of trying to extract the capabilities of its AI models through distillation. Distillation is a process where a smaller AI model is trained using outputs from a more advanced one. In a letter to two US senators, Anthropic claimed such efforts could help Chinese AI firms match the capabilities of its advanced Mythos Preview models faster.

Earlier this year, Anthropic said it found activity linked to accounts believed to be associated with senior staff from several Chinese AI labs. These accounts allegedly attempted to distil Anthropic's models. The company has long restricted access to Claude in China, citing national security concerns.

Despite these restrictions, Claude Code remains popular among Chinese developers. Many reportedly use overseas servers to access the service. Reuters noted that enforcing restrictions on individual users is difficult because internet traffic can be routed through servers outside China. However, companies face stricter legal and compliance requirements, making internal bans easier to implement.

Shift Toward Domestic AI Tools

Neither Alibaba nor Anthropic has publicly addressed the allegations about model distillation or the reported workplace policy. The move comes as Chinese AI companies increase their focus on domestic and open-source AI models, such as DeepSeek, Alibaba's Qwen, Moonshot, and Zhipu. This shift reduces reliance on overseas AI systems.

Alibaba is not alone in moving employees away from Claude Code. The Verge reported that Microsoft is also reducing use of Claude Code within the company. Microsoft plans to remove many Claude Code licenses and encourage developers to use its own GitHub Copilot CLI. Unlike Alibaba, Microsoft's decision is reportedly aimed at consolidating internal AI tools and reducing costs. Anthropic's AI models will still be available through Microsoft's Copilot CLI platform.