China flags Claude Code 'backdoor'; Alibaba bans the tool

China's Ministry of Industry and Information Technology warned on July 8 that Anthropic's Claude Code contains a 'security back-door vulnerability that poses a serious threat,' after researchers alleged hidden code that steganographically detected whether users were based in China or affiliated with Chinese AI labs. Anthropic said the mechanism was an experiment launched in March to curb account abuse and model distillation, and that the code was removed in a pull request merged July 1. Alibaba ordered employees to stop using Claude Code for work effective July 10, adding it to a list of high-risk software.