Alibaba has implemented a ban on employees using Anthropic's Claude Code in the workplace, citing alleged backdoor risks.This move comes amid escalating tensions between Alibaba and Anthropic, with the latter accusing Alibaba of illicitly extracting capabilities from its Claude AI model.The dispute highlights the broader competition between U.S.and Chinese tech giants in advancing artificial intelligence.

Anthropic claims Alibaba engaged in a 'distillation' process, training a less capable model on Claude's outputs to accelerate China's access to advanced AI features.

Alibaba's ban follows reports that Claude Code included mechanisms to inspect user environments, such as timezone and proxy data, and insert markers into prompts sent to Anthropic's servers.Anthropic attributes the feature to an experiment aimed at preventing account abuse by unauthorized resellers.However, enforcing restrictions on Chinese users remains challenging, as individuals can deploy servers in the U.S.to mask their location.The controversy underscores the geopolitical tensions in the AI race, with companies navigating legal and compliance risks.