U.S. Bans Anthropic, Taps OpenAI for Pentagon
The Trump administration has ordered all military contractors and federal agencies to stop using AI from Anthropic, citing national security risks. Just hours later, OpenAI announced a new deal to supply the Pentagon with advanced AI systems. The move effectively sidelines a major OpenAI competitor from government contracts and solidifies OpenAI's role as the U.S.'s preferred AI partner.
The standoff escalated after Anthropic refused to remove safeguards preventing its AI, Claude, from being used for mass domestic surveillance or in fully autonomous weapons systems. The Pentagon demanded unrestricted use for all "lawful purposes," leading to the impasse. Federal agencies now have a six-month period to phase out Anthropic's technology. Defense Secretary Pete Hegseth designated Anthropic a "supply-chain risk," a label historically reserved for foreign adversaries and never before publicly used against a U.S. company. This designation could bar any of the Pentagon's extensive network of contractors from doing business with Anthropic, a move some experts have called "attempted corporate murder." Anthropic has vowed to challenge this "legally unsound" and "unprecedented" designation in court. The now-canceled Pentagon contract was valued at up to $200 million. OpenAI's new deal to fill the gap is reportedly for a similar amount. Interestingly, OpenAI's CEO Sam Altman stated their agreement with the Pentagon includes the same "red lines" on surveillance and autonomous weapons that were at the heart of the dispute with Anthropic. This conflict occurs amidst a fierce rivalry for market and technological dominance between the two AI giants. Anthropic was founded by former OpenAI leaders and has emphasized a safety-first approach with its "Constitutional AI" training. Both companies are backed by overlapping venture capital firms and major tech players, with Amazon and Google invested in Anthropic, while Microsoft and SoftBank have heavily backed OpenAI. The ban has drawn criticism from some lawmakers and solidarity from within the tech industry. Hundreds of employees from Google DeepMind and OpenAI signed an open letter titled "We Will Not Be Divided," supporting Anthropic's stance. OpenAI's own CEO, Sam Altman, publicly stated he trusted Anthropic and shared their "red lines" on military AI use.
