US Gov Bans Anthropic, Taps OpenAI
The Trump administration has ordered all federal agencies and military contractors to stop using AI systems from Anthropic, which the Pentagon labeled a "supply risk." Just hours later, OpenAI announced a major contract with the Pentagon to deploy its own AI systems, cementing its role as the U.S. government's preferred AI supplier.
The dispute escalated after Anthropic refused to remove safeguards that prevent its AI, Claude, from being used for mass domestic surveillance or in fully autonomous weapons systems without human oversight. The company and its CEO, Dario Amodei, stated they could not "in good conscience" agree to the Pentagon's demand for unrestricted use of its technology for "all lawful purposes." In response, the Trump administration threatened to invoke the Korean War-era Defense Production Act to compel Anthropic's compliance. The Pentagon also warned it would designate the AI firm a "supply chain risk," a label typically reserved for companies from adversarial nations, which could have significantly damaged Anthropic's business. President Trump announced the directive for all federal agencies to cease using Anthropic's technology on Truth Social, giving a six-month phase-out period. He accused the company of being a "radical left, woke company" and claimed their stance was "putting AMERICAN LIVES at risk." The OpenAI deal, announced by CEO Sam Altman, includes deploying its models within the Pentagon's classified networks. Crucially, the agreement reportedly includes the very same "red lines" Anthropic had insisted on, such as prohibitions on domestic mass surveillance and a requirement for human responsibility in the use of force. This is not the first major government contract for either company. Both OpenAI and Anthropic, along with Google and xAI, were previously awarded contracts worth up to $200 million each to provide AI capabilities to the Department of Defense. OpenAI had also launched an "OpenAI for Government" initiative in June 2025 to consolidate its work with various federal agencies.
