International Business Machines Corp. has agreed to let China review some product source code in a secure room, according to two people briefed on the practice, making it the first major U.S. tech company to comply with Beijing’s recent demands for a stronger hand in foreign technology there.
IBM has begun allowing officials from China’s Ministry of Industry and Information Technology to examine proprietary source code—the secret sauce behind its software—in a controlled space without the ability to remove it from the room, the people said. It wasn’t clear which products IBM was allowing reviews of or how much time ministry officials can spend looking at the code. The people said the practice was new and implemented recently.
IBM said in a statement Friday that it had established in several countries the capability to conduct limited tests in a controlled IBM environment to reassure clients and others that there was no way for third parties to access its technology.