ZCode silently uploaded dev workspaces to cloud storage
An AI coding assistant from Chinese company Z.ai, also known as Zhipu, was reportedly uploading entire developer workspaces to cloud storage by default. The feature was on without users realizing it.
What Happened
ZCode, Z.ai’s coding assistant built on its GLM-5.3 model, shipped with a default-on indexing feature. According to user reports, that indexing process did not stay local. It pushed full workspace contents to cloud storage, meaning source code, configs, and any secrets sitting in those directories went with it.
Z.ai confirmed the behavior and responded in version 3.14.0. The company disabled the upload mechanism, deleted the related cloud storage, open-sourced the assistant, and added zero-data-retention options for users who want a documented guarantee that nothing leaves their machine.
The Wider Lesson for Developers
This is not a Z.ai specific problem. Any AI coding assistant with workspace indexing, context syncing, or cloud telemetry has the same surface area. These tools run with broad file system access by design, which means they have the same reach as any privileged process on your machine.
If you install an AI coding assistant and do not audit its network activity and storage permissions, you are trusting a default configuration written by a team whose incentives may include improving their models with your code. That is worth verifying, not assuming.
What to Check Right Now
- Review the data handling and telemetry settings in every AI coding assistant you have installed.
- Check whether workspace indexing uploads to a remote endpoint or stays local.
- Look for zero-data-retention or local-only mode options and enable them if available.
- Add egress monitoring to your dev environment to catch unexpected outbound connections from editor processes.
- Treat API keys,
.envfiles, and credentials in your workspace as potentially exposed if you ran any cloud-indexing tool without reviewing its settings.
The ZCode incident is a useful data point for any team evaluating AI developer tooling. Default settings are a policy decision, and they deserve the same scrutiny as any other software you give elevated access to.
I’m founder of BizStack at Cagri Sarigoz LLC and a passionate advocate for entrepreneurs.
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