US Bans Anthropic, Pentagon Pivots

The dispute escalated after Anthropic CEO Dario Amodei stated the company "cannot in good conscience accede" to Pentagon demands for unrestricted use of its AI. This followed a deadline from Defense Secretary Pete Hegseth to loosen ethical guidelines or lose a $200 million contract. President Trump announced on Truth Social that federal agencies must phase out Anthropic's technology, giving the Pentagon a six-month transition period. Defense Secretary Pete Hegseth then designated Anthropic a "supply chain risk," a label typically reserved for foreign adversaries like Huawei, effectively barring military contractors from doing business with the company. Anthropic's primary concern was to prevent its AI, Claude, from being used for mass surveillance of Americans or in fully autonomous weapons systems without human oversight. The company, which said its Claude model was already in use by the CIA and NSA, has stated its intention to challenge the "legally unsound" designation in court. The new OpenAI partnership will see its models deployed on the Pentagon's classified networks. CEO Sam Altman confirmed the agreement includes prohibitions on domestic mass surveillance and a requirement for human responsibility in the use of force, conditions similar to those Anthropic had sought. The deal is part of a broader "OpenAI for Government" initiative launched in June 2025, which consolidated existing work with agencies like NASA and the Treasury Department. This initiative began with a $200 million contract with the Pentagon's Chief Digital and Artificial Intelligence Office to prototype "frontier AI capabilities." The move has drawn reactions from across the tech industry. Ilya Sutskever, co-founder of OpenAI, called it "extremely good" that Anthropic did not back down, while SkyBridge Capital's Anthony Scaramucci described the government's actions as "bullying."