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Trump directs federal agencies to end Anthropic AI contracts
US President Donald Trump announced Friday that all federal agencies must immediately cease using technology from AI developer Anthropic, escalating a public standoff with the company over military access to its tools.
Dispute over military use triggers government ban
Trump's directive follows Anthropic's refusal to grant the US Department of Defense unrestricted access to its AI systems, including the Claude chatbot. Defense Secretary Pete Hegseth labeled the company a "supply chain risk" earlier this week-a first for a US firm-blocking military contractors from engaging with Anthropic.
In a Truth Social post, Trump declared: "We don't need it, we don't want it, and will not do business with them again!" The order mandates a six-month phaseout of Anthropic's tools across government operations.
Anthropic vows legal challenge to designation
The company condemned the Pentagon's actions as "legally unsound" and warned of a "dangerous precedent" for firms negotiating with the government. In a statement Friday, Anthropic asserted it had received no formal notification about the supply chain risk designation but pledged to contest it in court.
"No amount of intimidation or punishment from the Department of War will change our position on mass domestic surveillance or fully autonomous weapons."
Anthropic statement
Anthropic's CEO, Dario Amodei, previously stated the company would assist in a "smooth transition" if the Pentagon abandoned its tools but criticized Trump's threat of "major civil and criminal consequences" for noncompliance during the phaseout.
Industry fallout and competing stances
The dispute has divided Silicon Valley. OpenAI CEO Sam Altman publicly supported Amodei's stance, echoing Anthropic's "red lines" against domestic surveillance and autonomous weapons. Altman confirmed OpenAI had secured a separate Pentagon deal while excluding such applications.
A former Defense Department official, speaking anonymously to the BBC, called the Pentagon's legal grounds for its actions "extremely flimsy," suggesting Anthropic's strong market position-valued at $380 billion earlier this month-reduced its financial dependence on the $200 million military contract.
Timeline of tensions
The conflict escalated rapidly after Hegseth summoned Amodei to Washington on Tuesday. The Defense Secretary issued two ultimatums: either grant the Pentagon "any lawful use" of Anthropic's tools or face designation as a supply chain risk and potential invocation of the Defense Production Act. By Thursday, Amodei rejected both demands, opting to sever ties with the military.
Anthropic, founded in 2021 by former OpenAI employees, has been a key AI provider for classified government work since 2024. Its tools remain unaffected for non-military customers unless they also contract with the Defense Department.
