Anthropic says it is rolling back a covert Claude Code tracking feature to identify users based in China or affiliated with Chinese AI labs, after backlash (Juro Osawa/The Information)

Anthropic is rolling back a covert tracking feature in Claude Code that identified users based in China or affiliated with Chinese AI labs, following public backlash. This incident highlights critical risks around hidden telemetry, user trust, and compliance violations that can damage enterprise relationships and expose organizations to regulatory and reputational harm. Technology leaders must now reassess their vendor risk management practices and establish stronger oversight mechanisms for AI tool transparency and data collection practices.