Alibaba has not commented on Anthropic’s accusations, but the company has moved to distance itself from Anthropic’s models amid ongoing scrutiny.

Last Friday, Alibaba banned its employees from using Claude Code for work, the South China Morning Post reported. According to a memo SCMP reviewed, Alibaba told employees the ban came in direct response to concerning news about a tracker Anthropic is using to monitor Chinese users.

“As Claude Code was recently discovered to carry back-door risks, after comprehensive evaluation, Claude Code has now been added to a list of high-risk software with security vulnerabilities,” the memo said.

For Alibaba, ignoring Anthropic’s determination to detect users connected to leading Chinese AI labs is risky.

Unlike individual users who can easily pay for cheap circumvention tech to evade Anthropic’s location blockers without fears of major repercussions, Alibaba could be exposed to legal and compliance risks if caught violating Anthropic’s terms, a source granted anonymity to discuss Alibaba’s Claude ban told Reuters.

For Anthropic, allowing the attacks to continue could hurt the company’s business. Some open source Chinese models are more popular than free and open American counterparts, the Post reported, and Fortune 500 CEOs have made it clear that they’re searching for cheaper AI solutions. For the US, not only would moving to block Chinese distillation of American models be challenging, but it could also be unpopular—blocking Americans from benefiting from cheaper AI alternatives from China, the Post suggested.

Anthropic tracking crossed “scary boundary”

In this climate, where a chatbot user’s loyalty depends on a cost-benefit analysis weighing the cost of accessing models against their capabilities, Anthropic likely can’t afford to lose user trust as it fights to keep frontier models ahead of China’s.