China’s Z.ai disables AI coding assistant features after security issue

Executives from artificial intelligence company Zhipu AI, also known as Knowledge Atlas Technology, semiconductor company Shanghai Iluvatar CoreX and surgical robotics company Shenzhen Edge Medical attend a listing ceremony at the Hong Kong Stock Exchange, in Hong Kong, China January 8, 2026. REUTERS/Kane Wu

Chinese startup Z.ai said on Monday it had disabled some features of its flagship AI coding assistant after some users reported it was uploading entire local code repositories onto overseas cloud servers without their consent.

Beijing-based Z.ai, also known as Zhipu, apologised in a social media post after Chinese developers last week wrote on social media that its ZCode had uploaded their code data from open-source developer platform Git to Alibaba Cloud.

Z.ai referred Reuters to its ⁠public ​statements when asked for further comment on the incident.

In a statement on Friday, Z.ai said the issue originated from ZCode’s “Codebase Indexing” feature which was enabled by default, and that it had patched the software vulnerability.

“Going forward, we will establish an ongoing product security vulnerability reporting and response process,” Z.ai said in a separate post on its official ​ZCode ​X account on Monday.

The rare public disclosure of a security breach ⁠by a Chinese AI lab comes amid global warnings about frontier AI security risks and after several leading U.S. AI companies have announced AI hacking and “rogue” AI agent incidents ‌in recent weeks.

China’s cyber regulator released an updated AI safety framework policy last week, warning about AI models’ shutdown resistance, evaluator deception and sandbox escape.

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Z.ai said last month its GLM-5.3 model approaches Anthropic’s Mythos in finding software vulnerabilities and released it after a two-week review, becoming the first Chinese lab to explicitly delay an AI model release for safety reasons.

Independent security assessment

Z.ai had initially apologised on Friday and said the data had been deleted, but users said they found the data was encrypted with ⁠a backend private key held ⁠only by Z.ai, meaning they could not open or verify their own uploaded files or independently confirm deletion.

Developers also wrote in posts on X ⁠and Chinese social media platform RedNote ‌there was no toggle to disable the feature and there was no prior ​acknowledgement in Z.ai’s privacy policy.

Chengming Technology said on social media on ‌Friday that six of its company coding workspaces were uploaded onto the cloud without consent by ZCode, including sensitive data such as complete source code, database passwords and employees’ personal information.

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On Monday, ‌Chengming Technology retracted its ​statement, saying that it ​had “wrong evidence”. The ​Chinese tech firm did not immediately respond to a request for comment.

Z.ai said on Monday that it had open-sourced the coding assistant which runs its latest ​GLM-5.3 AI model and disabled certain features, pledging to make the product ⁠more transparent.

“We welcome developers to continue reviewing ZCode and reporting potential issues.”

Z.ai said an independent security assessment by the Chinese industry ministry’s affiliated IT standards think tank and Chinese cybersecurity firm NSFOCUS found that users’ code data had been ‌deleted and was ⁠not retained by the cloud platform.

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Z.ai said it had enabled a zero-data retention feature on the coding assistant used by developers and tech enterprises.

“Once again, we ​sincerely apologize and welcome continued scrutiny from the community. The full security assessment report will be released soon,” Z.ai wrote on Monday.