US Government Bans Anthropic, Taps OpenAI for Pentagon Deal
The Trump administration has ordered all federal agencies and military contractors to stop using AI from Anthropic, with the Pentagon labeling the high-profile startup a “supply risk.” Just hours later, rival OpenAI announced a major new deal with the Pentagon, dramatically reshaping the government's AI vendor landscape in a single day.
The standoff escalated after Anthropic refused to remove safeguards that prohibit its AI, Claude, from being used for mass domestic surveillance or to power fully autonomous weapons. This clashed with the Pentagon's demand that its vendors allow their technology to be used for "all lawful purposes." In response, Defense Secretary Pete Hegseth designated Anthropic a "supply chain risk to national security," a label historically applied to foreign adversaries like Huawei. This designation bars any contractor or partner doing business with the U.S. military from also conducting commercial activity with Anthropic. President Trump personally weighed in on his Truth Social platform, calling the company "Leftwing nut jobs" and stating their stance was "putting AMERICAN LIVES at risk." Federal agencies and contractors have been given a six-month window to transition away from Anthropic's technology, which had been integrated into sensitive intelligence and operational planning systems. Anthropic's now-canceled contract was worth up to $200 million. The company's Claude AI was the first of its kind deployed on the U.S. government's classified networks in June 2024 and is used by the CIA and NSA for intelligence analysis. The new OpenAI deal is also valued at up to $200 million and runs through July 2026. It focuses on developing "frontier AI prototypes" for challenges including cyber defense, threat detection, and streamlining military healthcare and logistics. This represents a significant milestone for OpenAI, which until early 2025 had policies that barred the use of its technology for military applications. The company has since shifted to allow work on "defensive national security applications."
