Claude Code implements several security measures designed to protect proprietary code and sensitive development information, though organizations should carefully evaluate these protections against their specific security requirements. The tool operates locally on your machine and communicates directly with Anthropic’s API without requiring backend servers or remote code indexing, which means your code isn’t stored on intermediate systems. Anthropic has implemented policies stating they will not train generative models using feedback from Claude Code, and they maintain limited retention periods for sensitive information, storing user feedback transcripts for only 30 days with restricted access to user session data.
However, several security considerations require careful attention when working with proprietary code. Claude Code does send code context to Anthropic’s servers as part of the conversation, which means sensitive code and business logic are transmitted over the network and processed by external systems. The tool can inadvertently access environment variables and configuration files that may contain API keys, database credentials, or other sensitive information, as reported in community security discussions. The permission system, while designed for security, has documented vulnerabilities where deny rules may be bypassed or ignored, potentially allowing unauthorized command execution.
Organizations implementing Claude Code for proprietary development should establish clear security policies and technical controls. These might include using Claude Code only in sandboxed environments for sensitive projects, implementing network restrictions to control data transmission, establishing guidelines for what types of code can be processed by Claude Code, and conducting regular security audits of Claude Code usage. Enterprise users can leverage Amazon Bedrock or Google Cloud Vertex AI integrations to maintain AI processing within their existing cloud security environments. Additionally, organizations should consider using community-developed sandboxing solutions for highly sensitive work and ensure that developers understand which information is transmitted to external services when using Claude Code.