Anthropic Tightens Claude Access Rules After Reported Chinese Workarounds

Alibaba Bans Employees From Using Anthropic's Coding Tool Over Distillation Scandal

Alibaba Bans Employees From Using Anthropic's Coding Tool Over Distillation Scandal While in the US, the government's periodic bans of the latest model from Anthropic (which has made AI doomerism - in hopes of getting the government to regulate everyone else expect Anthropic, yet repeatedly achieving just the opposite - into an art form) has been all the rage in recent months, in China it is the other way around, with China's tech giant Alibaba banning employees from using Anthropic's Claude ‌Code at work after the tool drew scrutiny for features that can help identify China-linked users, Reuters reported. The ban is part of a deepening spat between the two companies after Anthropic accused Alibaba of illicitly extracting ​its Claude AI model capabilities - a dispute that highlights the frantic race between the U.S. and ​China to take the lead in artificial intelligence. Claude Code is Anthropic's AI coding assistant for software developers, and has become popular among programmers in China despite Anthropic's restrictions on access by users and entities in China. To avoid further escalation of the distillation scandal, Reuters says that Alibaba employees were being told to use the company's own coding platform Qoder. As we reported at the time, in late June Anthropic said that it had suffered a strike by Alibaba, which it described as a "distillation" effort that involves training a less capable model on the outputs of a stronger one. The distillation helps accelerate China's ability to reach Anthropic's advanced Mythos Preview capabilities, the company alleged in a letter sent to two U.S. senators. Alibaba's ban comes just days after developers said Claude Code contained mechanisms that inspected user environments, including timezone and proxy-related information, and inserted subtle markers into prompts sent to Anthropic's servers. An Anthropic employee wrote on Tuesday on X that the feature was "an experiment we launched in March" intended to prevent account abuse by unauthorized resellers and protect against model distillation. The person who spoke to Reuters about Alibaba's ban said that Anthropic's restrictions targeting China were difficult to enforce on individual users who can deploy servers in the United States and make traffic appear as if it originated there. But companies were now more aware of legal and compliance risks. As US AI model developers seek to prevent unauthorized access, resale and distillation of their systems, Chinese cloud and AI firms have shifted toward domestic and open-source models such as DeepSeek, Alibaba's ?Qwen, Moonshot and Zhipu. At the same time, Chinese AI models are making inroads in the U.S. market — a development that sparked concern among some U.S. industry experts, since China's models are about 90% cheaper yet perform just fractionally worse than the latest US frontier models.  Souce: UBS We discussed this extensively in one of our flagship reports, "Answering The "Trillion Dollar Question": Are China's AI Models A Better Value Than US Models." The answer, judging by the rapid token transition to China, is a resounding yes. Tyler Durden Fri, 07/03/2026 - 22:00

4 hours ago

Alibaba To Ban Claude Code In Workplace Over Alleged Backdoor Risks

Alibaba has reportedly banned employees from using Anthropic's Claude Code and directed them to its own Qoder platform amid a growing dispute over features that can help identify China-linked users. Reuters reports: The ban is part of a deepening spat between the two companies after Anthropic accused Alibaba of illicitly extracting its Claude AI model capabilities -- a dispute that highlights the frantic race between the U.S. and China to take the lead in artificial intelligence. [...] Anthropic said last month that it had suffered a strike by Alibaba, which it described as a "distillation" effort that involves training a less capable model on the outputs of a stronger one. The distillation helps accelerate China's ability to reach Anthropic's advanced Mythos Preview capabilities, it said in a letter seen by Reuters that was sent to two U.S. senators. Alibaba's ban comes just days after developers said Claude Code contained mechanisms that inspected user environments, including timezone and proxy-related information, and inserted subtle markers into prompts sent to Anthropic's servers. An Anthropic employee wrote on Tuesday on X that the feature was "an experiment we launched in March" intended to prevent account abuse by unauthorized resellers and protect against model distillation. The person who spoke to Reuters about Alibaba's ban said that Anthropic's restrictions targeting China were difficult to enforce on individual users who can deploy servers in the United States and make traffic appear as if it originated there. But companies were more aware of legal and compliance risks, the person added. Read more of this story at Slashdot.

4 hours ago

Anthropic Moves To Shut Loopholes Letting Chinese Tech Firms Access Claude

Anthropic Moves To Shut Loopholes Letting Chinese Tech Firms Access Claude Days after the Commerce Department lifted three-week-old export controls on Anthropic's Fable and Mythos AI models over national security concerns, a new report says the company is moving to close loopholes that have allowed Chinese firms to access its most advanced models. The Financial Times cites people familiar with the matter who say Chinese companies, such as Ant Financial, used overseas subsidiaries, cloud providers, and internal corporate networks to access AI chatbots such as Claude Code.   To note, Alibaba owns about one-third of Ant Financial. Alibaba was recently blacklisted by the US Government over concerns that it was effectively an arm of the Chinese military.  Related: Anthropic Accuses Alibaba Of Running Major "Adversarial Distillation" Campaign To Extract Claude Capabilities Ant reportedly provided employees with corporate Claude accounts routed through its Singapore-linked intranet, while ByteDance employees have used VPNs and expense reimbursements for personal Claude subscriptions. The workarounds do not appear to violate US or Chinese law, but they breach Anthropic's terms of service, which ban Chinese companies and Beijing-controlled foreign entities from using its models. Anthropic said it prohibits access from unsupported regions, including China, and continuously updates enforcement systems to detect evasion. FT provided more details on its crackdown: As part of its efforts to crack down on unauthorised access, Anthropic has targeted "transfer station" services, which relay requests from users in mainland China through Claude accounts registered overseas before returning the responses. However, larger Chinese AI groups generally avoid transfer stations because the services' operators are widely suspected of storing or reselling prompts. Executives worry rivals could analyse those requests to understand how they are using advanced models to improve their own systems. What's ironic is that a company behind one of the world's most advanced coding models apparently failed to build the proper guardrails needed to keep Chinese firms from accessing it, even as it works to close those loopholes. Tyler Durden Fri, 07/03/2026 - 13:20

13 hours ago

Anthropic Reportedly Moves Tightens Rules After Chinese Firms Bypass Claude Ban

Anthropic is reportedly tightening its restrictions after identifying multiple methods used by Chinese companies to bypass its ban on access to Claude. Anthropic is moving to shut loopholes that have allowed Chinese companies to circumvent the AI startup's restrictions on accessing its Claude large language models.The Financial Times found that companies including Ant Financial had accessed Anthropic's Claude AI tools through overseas subsidiaries, cloud providers and other workarounds. These findings point to a pattern where Chinese firms have used indirect routes to keep using Claude despite Anthropic's policy explicitly barring such access.Anthropic Accuses Alibaba Of Large-Scale AI Theft, Claims Chinese Giant Used Almost 25,000 Fraudulent Accounts To Generate 28.8 Million Exchanges With ClaudeHow Chinese firms reportedly bypassed the restrictionsAccording to the report, different companies used different tactics to get around the ban. Ant reportedly provided employees with corporate Claude accounts linked to its Singapore based entity, while ByteDance reimbursed engineers for personal Claude subscriptions that they accessed using virtual private networks.Some companies also accessed Claude through foreign subsidiaries using cloud infrastructure, including Microsoft's Azure platform, the newspaper said. The report noted that these practices reportedly do not violate US or Chinese law, but they do breach Anthropic's terms of service, which prohibit Chinese companies and foreign entities under their control from using its AI models.Microsoft Tells Employees To Avoid Anthropic's Claude Fable 5 Over Data Retention ConcernsAnthropic's response and detection effortsAnthropic has stepped up efforts to detect and shut down such access, including monitoring accounts for indicators such as users' computer time zones and targeting so called transfer station services that relay requests through overseas Claude accounts.Responding to the report, Anthropic reiterated its existing position on China access. The company stated that it explicitly prohibits accessing or facilitating access to Claude in unsupported regions, including China, and described itself as the only frontier AI company that restricts sales to PRC controlled companies, including subsidiaries incorporated outside China. Anthropic said it enforces this policy through continuous, evolving detection systems, working alongside its partners to identify and ban accounts that violate its policies.Context: A broader pattern of scrutinyThis is not the first time Anthropic has flagged unauthorised use of its models by Chinese entities. The company had earlier accused operators linked to Alibaba's Qwen AI lab of running a large scale distillation campaign in mid June, involving thousands of fake accounts generating tens of millions of interactions with Claude, according to reports citing a letter Anthropic sent to US senators. Anthropic has also been reported to require identity verification, including government issued IDs, for accounts flagged as suspicious.

20 hours ago