The competition between the United States and China to dominate artificial intelligence has entered another important chapter. This time, the spotlight is on Alibaba and Anthropic, two major AI companies that are now at the centre of a growing dispute over AI technology, security and intellectual property.
Alibaba has reportedly instructed its employees to stop using Anthropic’s AI coding assistant, Claude Code, beginning July 10. Instead, workers have been told to use Alibaba’s own AI coding tool, called Qoder.
While this may look like a simple workplace software decision, it is actually part of a much bigger story. The latest development highlights the growing tension between American and Chinese AI companies as both countries compete to become global leaders in artificial intelligence.
Why Alibaba Is Banning Claude Code
According to reports, Alibaba classified Claude Code as high risk software after concerns emerged that the tool contained features capable of identifying users linked to China.
Developers recently discovered that certain versions of Claude Code inspected user environments, including information such as time zones and proxy settings. Anthropic later confirmed that it had previously tested these features as part of an effort to stop unauthorised access to its AI models and prevent companies from copying its technology. The company said the experiment had already been replaced with stronger security measures and was being removed.
Despite that explanation, Alibaba reportedly decided the risks were too great. Employees have now been instructed to stop using Claude Code for work and switch to the company’s own AI coding assistant, Qoder.
What Is Claude Code?
Claude Code is an AI powered programming assistant developed by Anthropic.
It helps software developers write code, fix programming errors, explain complex code and complete development tasks much faster. The tool has become popular among developers because of its ability to understand large software projects and provide accurate coding suggestions.
Although Anthropic officially restricts access to its AI models in China, many Chinese developers have reportedly continued using Claude Code through overseas servers and other workarounds. Anthropic has spent months trying to close those loopholes.
The Dispute Goes Beyond Security
The disagreement between Alibaba and Anthropic did not begin with the latest software ban.
Just days earlier, Anthropic accused Alibaba of carrying out what it described as one of the largest known AI “distillation” efforts. According to the company, operators linked to Alibaba used thousands of fake accounts and millions of interactions with Claude to help improve Alibaba’s own AI models. Anthropic claims this activity allowed competitors to learn from Claude’s responses without investing the same time and resources required to build a similar model from scratch. Alibaba has not publicly responded to these allegations.
These accusations have made the relationship between the two companies even more tense.
What Is AI Distillation?
AI distillation is a technique where one AI model learns from the outputs of another AI model.
In many cases, distillation is a legitimate research method used by companies to create smaller and faster models. However, problems arise when companies use another firm’s proprietary AI system without permission to improve their own products.
Anthropic believes this is exactly what happened.
If the company’s allegations are correct, it means competitors could significantly reduce the cost and time required to build advanced AI systems by learning from existing models instead of developing everything independently. That is why AI companies are investing heavily in protecting their models from unauthorised access.
Why This Matters Beyond Alibaba
This dispute reflects a much larger competition between the United States and China.
Over the past two years, both countries have invested billions of dollars in artificial intelligence. American companies such as Anthropic, OpenAI, Google and Microsoft continue to build increasingly powerful AI systems. At the same time, Chinese companies including Alibaba, DeepSeek, Baidu, Zhipu AI and Moonshot AI are rapidly improving their own models.
Governments have also become deeply involved.
The United States has introduced export controls and other restrictions aimed at limiting China’s access to advanced AI technologies. China, meanwhile, has accelerated investment in domestic AI research while encouraging companies to rely more on homegrown technologies.
As a result, business decisions that once seemed ordinary are now often connected to national technology strategies.
Why Alibaba Wants Employees Using Qoder
By asking employees to use Qoder instead of Claude Code, Alibaba is doing more than replacing one software tool with another.
Using an internal AI assistant allows the company to keep sensitive business information inside its own ecosystem. It also reduces dependence on foreign AI providers whose policies or restrictions may change at any time.
Many large companies already limit which AI tools employees can use for work because they are concerned about confidential information being uploaded to third party systems.
For Alibaba, encouraging adoption of its own AI platform could also help improve Qoder by giving it more real world usage and feedback from employees.
What This Means for Developers
For software developers, the latest dispute shows that AI coding tools are becoming part of a much bigger geopolitical competition.
Developers may increasingly find that the tools available to them depend not only on technical performance but also on company policies, national regulations and international relations.
Businesses may also become more careful about which AI services employees are allowed to use, especially when handling sensitive company data.
This could lead to more organisations developing their own internal AI tools rather than relying entirely on external providers.
The Bigger Picture
The competition between China and the United States is no longer limited to smartphones, computer chips or social media platforms. Artificial intelligence has become one of the most important technologies shaping the future of business, science, healthcare, education and national security.
Every major development, whether it is a new AI model, government regulation or workplace software policy, has the potential to influence this global race.
Alibaba’s decision to ban Claude Code is another reminder that AI is no longer just about creating smarter software. It is also about protecting technology, securing valuable data and maintaining a competitive advantage in one of the world’s fastest growing industries.
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The Bottom Line
Alibaba’s decision to ban Claude Code may appear to be an internal company policy, but it reflects much larger changes happening across the global AI industry. As American and Chinese technology companies compete for leadership, disputes over security, intellectual property and access to advanced AI models are becoming more common.
For businesses, developers and everyday users, the message is clear. The future of artificial intelligence will not be shaped only by better technology. It will also be shaped by trust, regulation, national interests and the ongoing competition between the world’s biggest AI powers. As that competition continues, stories like this are likely to become increasingly common.
