BUSINESS

Z.AI Open-Sources Coding Tool After Backlash Over Silent Data Uploads

Published: Sep. 22, 2026 12:16 p.m. GMT+8

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Z.AI apologized to ZCode users on the afternoon of Sept. 18, stating that the issue stemmed from ZCode’s codebase indexing feature. Photo: VCG

Chinese AI company Z.AI open-sourced its programming framework ZCode on Monday after facing intense developer backlash over the software silently uploading users’ private code.

The controversy erupted on Sept. 18 when an engineer revealed that ZCode secretly encrypted and uploaded entire user workspaces to Alibaba Cloud without consent.

The uploaded data included full version histories and large file caches, which could only be decrypted by Z.AI. The incident sparked widespread concern within the developer community and underscores the growing data privacy challenges and trust issues AI companies face as they rush to deploy new tools.

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Z.AI open-sourced ZCode after backlash over secretly uploading users' code to Alibaba Cloud.
Chengming Technology withdrew its legal letter alleging trade secret theft, admitting errors.
Z.AI adopted a zero-retention policy; audits confirmed data deletion and vulnerability removal.

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Who’s Who

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What Happened When

September 18, 2026：: An engineer revealed that ZCode secretly encrypted and uploaded entire user workspaces to Alibaba Cloud without consent. Z.AI apologized later that afternoon, explaining the issue stemmed from a repository indexing feature. The dispute escalated on the evening of September 18, when Taiyuan Chengming Technology Co. Ltd. sent a legal letter accusing Z.AI of uploading trade secrets from six of its workspaces.

September 20, 2026：: Z.AI introduced a zero-retention data policy.

September 21, 2026：: Z.AI open-sourced its programming framework ZCode. On Monday evening, Chengming Technology released a statement withdrawing the legal letter and its claims, admitting errors and inappropriate wording.