President Donald Trump has ordered federal departments to halt the use of AI tools developed by Anthropic, escalating a dispute between the White House and the fast-growing technology firm.
In a recent post on Truth Social, Trump said he would instruct all government agencies to stop working with the company’s systems. “We do not need it, we do not want it,” he wrote, adding that the administration would no longer conduct business with the firm.
The confrontation stems from Anthropic’s refusal to grant the U.S. military broad access to its AI models. The company, led by chief executive Dario Amodei, declined to agree to terms that would allow unrestricted use of its technology by the Pentagon. Defense Secretary Pete Hegseth responded by declaring the company a “supply chain risk,” a designation that could bar contractors tied to the military from engaging in commercial activity with the firm.
If applied, it would mark the first time a U.S. company has publicly received that label under such circumstances.
Anthropic said it had not received formal notice from the White House or the Defense Department regarding the status of negotiations. However, the company indicated it would challenge any such classification in court, arguing that the move would lack legal basis and could set a troubling example for other American businesses negotiating with federal agencies.
The company has voiced unease recently about potential uses of its technology in domestic surveillance or autonomous weapons systems. In a statement, Anthropic said no pressure from what it referred to as the “Department of War” would alter its position on those issues. Trump has occasionally used that alternative name when referring to the Defense Department.
A former Defense Department official, speaking anonymously, noted that Anthropic may hold leverage in the standoff, describing the legal grounds for invoking the Defense Production Act or imposing a supply chain risk label as weak.
Under Trump’s directive, Anthropic’s software will be phased out of government operations within the next six months. The impact on private-sector clients is expected to be limited to firms that also hold Defense Department contracts, which may need to suspend use of Anthropic tools for work tied to the military.
Before the president’s announcement, Anthropic had indicated it would assist with a transition if the Pentagon chose to discontinue its services. Trump later warned that the company should cooperate during the phase-out period, suggesting that failure to do so could prompt further executive action.
Anthropic started supplying AI systems to U.S. government agencies in 2024 and was among the first advanced AI developers to support classified projects. Its work with the Pentagon is part of a contract valued at $200 million.
OpenAI CEO Sam Altman expressed support for Amodei in an internal memo, saying his company maintains similar boundaries regarding military use of its models.
Altman later confirmed that OpenAI had secured an agreement with the Defense Department to deploy its systems on classified cloud networks, with restrictions against unlawful applications such as domestic surveillance or offensive autonomous weapons.
Major technology developers like D-Wave Quantum Inc. (NYSE: QBTS) could be concerned by this development that the federal government can quickly become hostile to firms that insist on their products being used in specific ways and not indiscriminately simply because a contract has been issued.
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