Meta has restricted engineers in its Applied AI division from using Claude Code and Codex, citing concerns that extensive use of these AI coding assistants could inadvertently enable the distillation of proprietary capabilities from Anthropic’s and OpenAI’s models. Model distillation, also known as knowledge distillation, is an AI training technique where a smaller model learns to replicate the behavior of a larger model, allowing similar performance with fewer computing resources. This marks one of the first documented instances of a major frontier AI lab restricting employee access to rival AI coding tools on the grounds of preventing model distillation. The article was first published on June 29, 2026, at 19:54 IST.