Trump Orders Federal Ban on Anthropic AI Amid Pentagon Standoff Over Military Use

When Anthropic CEO Dario Amodei refused to budge on his company’s ethical red lines this week, he likely knew there would be consequences. What he may not have anticipated was the speed and severity of the Trump administration’s response. On Friday, President Donald Trump ordered every federal agency to “IMMEDIATELY CEASE” all use of Anthropic technology—a dramatic escalation in the unfolding standoff between the Pentagon and one of America’s most prominent AI companies.

“The Leftwing nut jobs at Anthropic have made a DISASTROUS MISTAKE trying to STRONG-ARM the Department of War, and force them to obey their Terms of Service instead of our Constitution.” — President Donald Trump

The Breaking Point

The confrontation reached its climax Friday afternoon when the Pentagon’s deadline for Anthropic to comply with military demands came and went without resolution. Defense Secretary Pete Hegseth promptly designated Anthropic a “supply-chain risk to national security,” a classification typically reserved for foreign adversaries rather than American technology firms.

“Effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic,” Hegseth wrote on X. “America’s warfighters will never be held hostage by the ideological whims of Big Tech.”

The Pentagon will continue using Anthropic’s AI services for a transition period of no more than six months to allow for migration to alternative providers. The Government Services Administration followed suit Friday evening, terminating its contracts with the company.

The Red Lines That Started It All

Mass surveillance and autonomous weapons—these were the two boundaries Anthropic refused to cross. For months, the company had been negotiating with the Pentagon over a $200 million contract to provide its Claude AI system for military applications. While Anthropic expressed willingness to support legitimate defense operations, it drew a hard line against uses it deemed incompatible with democratic values.

“Anthropic understands that the Department of War, not private companies, makes military decisions,” Amodei stated Thursday. “We have never raised objections to particular military operations nor attempted to limit use of our technology in an ad hoc manner. However, in a narrow set of cases, we believe AI can undermine, rather than defend, democratic values.”

The Pentagon, for its part, insisted it has “no interest” in using AI for mass surveillance or autonomous weapons. “This narrative is fake and being peddled by leftists in the media,” spokesperson Sean Parnell said Thursday. The military required only that its AI tools be available for “all lawful purposes”—language Anthropic viewed as too broad to ensure meaningful safeguards.

“For all the differences I have with Anthropic, I mostly trust them as a company, and I think they really do care about safety.” — Sam Altman, OpenAI CEO

Silicon Valley’s Surprising Solidarity

In an unexpected twist, Anthropic found itself receiving support from its fiercest rivals. OpenAI CEO Sam Altman, who has had a contentious relationship with Amodei since the latter left OpenAI to found Anthropic in 2021, publicly sided with the company on CNBC Friday morning.

“I don’t personally think the Pentagon should be threatening DPA against these companies,” Altman said, referring to the Defense Production Act that the military had threatened to invoke against Anthropic. He confirmed that OpenAI shares Anthropic’s “red lines” against autonomous weapons and mass surveillance.

Behind the scenes, the solidarity ran deeper. More than 300 Google employees and over 60 OpenAI employees signed an open letter urging their leaders to stand with Anthropic. “They’re trying to divide each company with fear that the other will give in,” the letter stated. “That strategy only works if none of us know where the others stand.”

Google DeepMind Chief Scientist Jeff Dean added his voice to the chorus, posting on X: “Mass surveillance violates the Fourth Amendment and has a chilling effect on freedom of expression. Surveillance systems are prone to misuse for political or discriminatory purposes.”

A Power Shift in Defense Technology

The Anthropic standoff marks a pivotal moment in the evolving relationship between the U.S. military and the technology industry. For decades following World War II, the government defined the frontier of advanced technology, setting requirements and funding foundational research while industry executed against government-driven specifications.

AI has inverted that model. Today, private capital, global competition, and commercial data scale are advancing AI at a pace that traditional government R&D structures cannot easily replicate. The Department of Defense is no longer defining the edge of what is technically possible in artificial intelligence—it is adapting to it.

“This is different for sure,” said Jerry McGinn, director of the Center for the Industrial Base at the Center for Strategic and International Studies. Pentagon contractors don’t usually get to tell the Defense Department how their products can be used “because otherwise you’d be negotiating use cases for every contract, and that’s not reasonable to expect.”

Yet artificial intelligence is a new and largely untested technology. “This is a very unusual, very public fight,” McGinn noted. “I think it’s reflective of the nature of AI.”

What’s at Stake

The implications extend far beyond Anthropic’s bottom line. The company, valued at $380 billion, is widely expected to go public this year. While the Pentagon contract represents a relatively small portion of its $14 billion in revenue, the reputational and competitive consequences of the federal ban could be significant.

For the broader AI industry, the dispute raises fundamental questions about the relationship between private technology companies and national security. As AI becomes increasingly central to military operations, intelligence analysis, and cybersecurity, the tension between corporate ethics policies and government requirements will only intensify.

Senator Mark Warner, Vice Chairman of the Senate Select Committee on Intelligence, criticized the administration’s approach Friday afternoon. “The president’s directive to halt the use of a leading American AI company across the federal government, combined with inflammatory rhetoric attacking that company, raises serious concerns about whether national security decisions are being driven by careful analysis or political considerations.”

Warner also suggested the moves against Anthropic could be a “pretext to steer contracts to a preferred vendor”—an apparent reference to Elon Musk’s xAI, which has reportedly faced questions about its safety and reliability record within the government.

The Road Ahead

Despite the force of the federal government coming down on Anthropic, a resolution remains possible. The company has stated it will “work to enable a smooth transition to another provider, avoiding any disruption to ongoing military planning, operations, or other critical missions.”

Whether Anthropic and the Pentagon can eventually reach an agreement depends on whether either side is willing to compromise on their core positions. The military wants unrestricted access to AI capabilities for lawful defense purposes. Anthropic wants guarantees that its technology won’t be used for mass surveillance or autonomous weapons systems that can kill without human input.

The outcome will help define the boundaries of AI ethics in national security contexts for years to come. As one defense technology expert noted, the question is whether the U.S. can build “a durable public-private compact that treats AI as foundational national security infrastructure rather than just another vendor relationship.”

For now, the standoff continues—with Anthropic shut out of federal contracts, the Pentagon searching for alternative AI providers, and the broader technology industry watching closely to see which side blinks first.

This article was reported by the ArtificialDaily editorial team. For more information, visit NPR, The Guardian, and CNBC.