ZCode AI coding assistant silently uploaded source code to the cloud
If you’re running an AI coding assistant on your local machine, this incident is worth understanding. Chinese AI lab Z.ai (also known as Zhipu) confirmed that its ZCode tool had been uploading entire local code repositories to Alibaba Cloud without user consent.
What Happened
Chinese developers reported on social media that ZCode was syncing their Git repositories to overseas cloud servers without any prompt or clear disclosure. Z.ai confirmed the issue originated from a feature called Codebase Indexing, which was enabled by default. The company patched the vulnerability and apologized publicly.
One Chinese tech firm, Chengming Technology, reported that six of its company coding workspaces had been uploaded, including complete source code, database passwords, and employees’ personal information. Chengming later retracted that statement, saying it had “wrong evidence.”
Why the Fallout Went Further
The initial apology did not fully land. Users found that their uploaded data had been encrypted using a backend private key held only by Z.ai. That meant developers could not open, inspect, or independently verify whether their files had actually been deleted. There was also no toggle to disable the feature and no mention of it in Z.ai’s privacy policy.
Where Things Stand Now
Z.ai has disabled the relevant features and open-sourced the ZCode assistant, which runs its GLM-5.3 model. An independent security assessment conducted by a Chinese industry ministry-affiliated IT standards think tank and cybersecurity firm NSFOCUS concluded that user code data had been deleted and was not retained by the cloud platform. Z.ai also said it has enabled a zero-data retention feature on the coding assistant.
The company said a full security assessment report will be released publicly. It has also committed to establishing an ongoing product security vulnerability reporting and response process.
The Operator Takeaway
Default-on cloud sync in a developer tool is a serious trust violation, especially when the data involved includes database credentials and source code. Before installing any AI coding assistant, check what data it indexes, where that data goes, and whether you can verify deletion independently. “Deleted” only means something if you can confirm it without taking the vendor’s word for it.
I’m founder of BizStack at Cagri Sarigoz LLC and a passionate advocate for entrepreneurs.
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