OpenAI Inks Pentagon Deal After Anthropic Ban
Just hours after the Trump administration banned competitor Anthropic as a "supply chain risk," OpenAI clinched a major multi-year contract with the U.S. Department of Defense. CEO Sam Altman said the deal includes "technical safeguards," cementing OpenAI's role as the U.S. government's key AI supplier.
The ban on Anthropic was unprecedented, marking the first time a U.S. company has been designated a "supply chain risk," a label typically reserved for foreign adversaries. President Trump's executive order directed all federal agencies to cease using Anthropic's technology, with the Pentagon given a six-month phase-out period. The administration threatened "major civil and criminal consequences" if the company was not helpful during the transition. The core of the dispute was Anthropic's refusal to agree to "unconditional military use" of its AI models. The company specifically sought to prohibit the use of its technology for domestic mass surveillance and in fully autonomous weapons systems that can kill without human input. Anthropic has stated it will challenge the "supply chain risk" designation in court, calling it "legally unsound." OpenAI's deal with the Pentagon reportedly includes the very same "red lines" that Anthropic advocated for. In a post on X, CEO Sam Altman stated that "prohibitions on domestic mass surveillance and human responsibility for the use of force" were part of the agreement. The technical safeguards are described as a "multi-layered approach," including cloud-only deployment to prevent use in autonomous weapons and the involvement of cleared OpenAI personnel. While the exact value of this new multi-year contract has not been disclosed, it follows a pattern of significant investment in AI by the Pentagon. In the past year, the Department of Defense has awarded contracts worth up to $200 million each to major AI labs, including a previous agreement with OpenAI. This new deal is part of a broader "OpenAI for Government" initiative launched in June 2025. The move has drawn mixed reactions. Top House Democrat Hakeem Jeffries praised Anthropic's "courage," while hundreds of employees from Google DeepMind and OpenAI signed an open letter in support of Anthropic's stance. Critics, however, have questioned the timing of OpenAI's deal, with some accusing the company of capitalizing on its competitor's ethical stand. Sam Altman has defended the agreement as an attempt to "de-escalate" the situation between the government and the AI industry.
