OpenAI Strikes Pentagon Deal Hours After Trump Blacklists Anthropic

When the clock struck 5:01 p.m. on Friday, the Pentagon’s deadline for Anthropic had officially passed. What happened next wasn’t just a contract dispute—it was a seismic shift in how artificial intelligence companies navigate the intersection of ethics and national security. Within hours, OpenAI announced it had struck its own deal with the Defense Department, stepping into the void left by its embattled rival.

“Two of our most important safety principles are prohibitions on domestic mass surveillance and human responsibility for the use of force, including for autonomous weapon systems. The DoW agrees with these principles, reflects them in law and policy, and we put them into our agreement.” — Sam Altman, OpenAI CEO

The Deadline That Changed Everything

The confrontation began earlier this week when the Pentagon demanded Anthropic remove safeguards preventing its Claude AI from being used for domestic mass surveillance or fully autonomous weapons. The company, valued at $380 billion and preparing for an IPO, refused. CEO Dario Amodei called the demands something his company could not “in good conscience accede to.”

President Trump responded swiftly. In a Truth Social post, he called Anthropic “leftwing nut jobs” and ordered every federal agency to “IMMEDIATELY CEASE all use of Anthropic’s technology.” Defense Secretary Pete Hegseth followed by designating Anthropic a supply chain risk to national security, effectively blacklisting the company from military contracts.

The timing was no coincidence. The administration’s actions came just as Anthropic was negotiating a contract worth up to $200 million—small by the company’s standards, but symbolically enormous. The dispute has become a flashpoint in the broader debate over whether AI companies can set ethical boundaries on how their technology is deployed.

OpenAI’s Strategic Pivot

The competitor’s advantage became clear within hours of Trump’s announcement. OpenAI, which had previously expressed similar ethical concerns to Anthropic, revealed it had reached an agreement to deploy its models on classified Pentagon networks. The deal includes the exact safeguards Anthropic had fought for: prohibitions on domestic mass surveillance and requirements for human oversight of autonomous weapons.

The safety calculus has shifted dramatically. In an internal note to staff reported by The Wall Street Journal, Altman had been working to negotiate these exact terms. The result is a contract that allows OpenAI to work with the military while maintaining its public commitment to responsible AI deployment.

The market response has been closely watched by investors. Anthropic’s IPO plans, already under scrutiny, now face additional headwinds. While CEO Dario Amodei has pointed out that the company’s valuation and revenue have grown since taking its stand against the administration, the blacklist designation creates uncertainty around enterprise partnerships and government contracts.

“This is different for sure. Pentagon contractors don’t usually get to tell the Defense Department how their products and services can be used, because otherwise you’d be negotiating use cases for every contract, and that’s not reasonable to expect. This is a very unusual, very public fight. I think it’s reflective of the nature of AI.” — Jerry McGinn, Center for Strategic and International Studies

The New AI-Military Landscape

The implications extend far beyond these two companies. The dispute has exposed fundamental tensions about AI safety in an era of rapid capability advancement. Anthropic, founded on a promise of responsible AI development, scrapped its core safety pledge this week—replacing hard commitments with what it calls “nonbinding, publicly declared targets.” The company cited competitive pressure from rivals racing ahead without similar guardrails.

Meanwhile, researchers at both OpenAI and Anthropic have resigned in recent weeks, warning of mounting risks. The tension around AI safety is already becoming a political issue, with New York State Assemblyman Alex Bores—who authored the nation’s first major AI safety law—now facing a $125 million super PAC backed by OpenAI cofounder Greg Brockman, Andreessen Horowitz, and Palantir’s Joe Lonsdale.

For the Pentagon, the episode raises questions about contractor relationships in the AI age. Hegseth accused Anthropic of delivering “a master class in arrogance and betrayal” and trying to “seize veto power over the operational decisions of the United States military.” But AI experts note that the technology is fundamentally different from traditional defense contracting—untested, rapidly evolving, and capable of autonomous decision-making.

Anthropic has vowed to challenge the supply chain risk designation in court, arguing it would “set a dangerous precedent for any American company that negotiates with the government.” The company maintains that its restrictions were never about blocking lawful military operations, but about two specific uses it considers outside the bounds of safe AI deployment: mass domestic surveillance and fully autonomous weapons.

The coming months will determine whether Anthropic’s principled stand becomes a cautionary tale or a rallying point. For now, OpenAI has secured its position as the Pentagon’s AI partner of choice—complete with the ethical safeguards its rival fought for and lost.

This article was reported by the ArtificialDaily editorial team. For more information, visit NPR and Al Jazeera.