Anthropic's Claude Code was found to contain hidden code that could track or flag users based on location, proxies, or ties to Chinese laboratories and could transmit sensitive information, including users' locations and identity‑related identifiers, to Anthropic's servers without consent. The backdoor prompted Alibaba to order its staff to stop using Claude Code.

China's regulator warned of a security backdoor in Claude Code, according to Dawn. Alibaba cited security risks related to hidden code tracking Chinese users as the reason for banning the tool, as reported by the South China Morning Post, and instructed employees to cease using Anthropic tools for work starting July 10, according to CNBC.

Anthropic later removed the embedded code after researchers raised concerns, Bluesky reported. Dawn described Claude Code as an AI coding agent that can generate computer code, debug software and review code based on user prompts.