The Pulse
Z.ai Disables ZCode Features After Code Upload Reports
Chinese AI startup Z.ai disabled features of its ZCode coding assistant after developers reported that it uploaded local code repositories to overseas cloud servers without consent.
AI.info Team ·
“Going forward, we will establish an ongoing product security vulnerability reporting and response process.”
Z.ai, the Chinese AI startup, in a statement reported by Reuters
Chinese AI startup Z.ai disabled several features of its ZCode programming assistant on September 21 after developers reported that the tool uploaded complete local code repositories to cloud servers without their consent. The Beijing-based company, also known as Zhipu, said the problem came from a “Codebase Indexing” feature that was enabled by default.
Z.ai said it had patched the software vulnerability, deleted the uploaded data and activated zero-data retention for the coding assistant used by developers and technology companies. The company also open-sourced the coding assistant that runs its latest GLM-5.3 model and invited outside developers to inspect it.
How ZCode’s default indexing drew scrutiny
The controversy surfaced after Chinese developers examined ZCode’s network activity and said the application packaged local workspace data before sending it to Alibaba Cloud. Reports described encrypted archives containing repository material, including version history and large-file caches. Users said the encryption key needed to inspect the archives was held on Z.ai’s backend, leaving them unable to verify the contents or independently confirm deletion.
Reuters reported that developers found no visible switch to disable the feature and no prior disclosure of the behavior in Z.ai’s privacy policy. The company’s explanation focused on the indexing function rather than describing the incident as intentional collection of user code.
Z.ai says an assessment found the data deleted
Z.ai said an independent review by an information-technology standards research body affiliated with China’s industry ministry and cybersecurity company NSFOCUS found that the uploaded code had been deleted and was not retained by the cloud platform. The full assessment report had not yet been released when the company made the statement.
The company said it had also introduced a zero-data-retention setting for the coding product. That measure addresses storage after processing, but the central concern raised by developers was the transfer itself: whether a local repository could leave a machine without a clear user action or an obvious way to prevent it.
“We welcome developers to continue reviewing ZCode and reporting potential issues,” Z.ai said in another statement reported by Reuters. The company said it would publish the complete security assessment later.
A disputed claim involving six workspaces
The incident widened on Friday, September 18, when Chengming Technology said six company coding workspaces had been uploaded by ZCode. The company alleged that the workspaces contained source code, database passwords and employees’ personal information.
Chengming Technology retracted that statement on Monday, September 21, saying it had relied on “wrong evidence.” The company did not immediately respond to Reuters’ request for comment. Its retraction narrows one of the most serious claims surrounding the incident, but it does not resolve the separate reports from developers who said they observed repository uploads from their own systems.
Why the response matters for coding assistants
ZCode is designed to work with local software projects, which gives it access to files, directories and repository metadata that ordinary chat applications do not need to see. Indexing can improve an assistant’s ability to answer questions about a project, but it also creates a direct boundary between a developer’s workstation and a vendor-controlled cloud service.
Z.ai’s response combines four measures: disabling affected features, patching the vulnerability, enabling zero-data retention and publishing the coding assistant for inspection. The company’s own account of the independent assessment remains the basis for its deletion claim until the promised report becomes public.
For developers, the immediate issue is not only whether ZCode retained uploaded material. It is whether a coding assistant clearly identifies when it is collecting a repository, what files it includes, where those files go and how users can stop the transfer before it begins.