OpenAI Inks Pentagon Deal After Rival Banned
OpenAI has secured a major deal with the Pentagon just hours after the Trump administration banned competitor Anthropic from all federal contracts. The administration designated Anthropic a "supply chain risk" in an unprecedented move that reshapes the AI landscape for government work. OpenAI CEO Sam Altman said the Pentagon partnership includes "technical safeguards" to address concerns about military use of AI.
The dispute with Anthropic centered on the company's refusal to remove safeguards that would prevent its AI, Claude, from being used for mass surveillance of American citizens or in fully autonomous weapons systems. The company stated that current AI models are not reliable enough for such applications and that mass domestic surveillance violates fundamental rights. In an unprecedented move against a domestic tech company, the Trump administration designated Anthropic a "supply chain risk," a label typically reserved for foreign adversaries. This designation effectively blacklists Anthropic from all federal contracts and requires any military contractor to certify they do not use the company's products. Anthropic has announced its intention to challenge the designation in court. OpenAI's agreement with the Pentagon, reportedly worth up to $200 million, allows for the use of its models in classified networks. Crucially, the deal incorporates the very same restrictions that Anthropic had requested, prohibiting use for autonomous weapons and domestic mass surveillance. OpenAI CEO Sam Altman stated the company will deploy field engineers to the Pentagon and use cloud-only networks to ensure safety protocols are followed. This deal marks a significant policy shift for OpenAI, which until early 2024 had a public policy that banned military-related work. The Pentagon has been actively pursuing AI partnerships, awarding contracts worth up to $200 million each to Google, xAI, Anthropic, and OpenAI in July 2025 to develop "agentic AI workflows." This push aligns with the Department of Defense's five ethical principles for AI—Responsible, Equitable, Traceable, Reliable, and Governable—which were adopted in early 2020. The Trump administration has been focused on accelerating AI development under an "America's AI Action Plan." This includes a series of executive orders aimed at reducing regulations, promoting the export of U.S. AI technology, and fast-tracking the construction of data centers.
