Trump orders all federal agencies to phase out use of Anthropic technology

Trump said most agencies must immediately stop using Anthropic's AI but gave the Pentagon a six-month period to phase out the technology that is already embedded in military platforms.

"We don't need it, we don't want it, and will not do business with them again!" Trump wrote.

At issue in the defense contract was a clash over AI's role in national security and concerns about how increasingly capable machines could be used in high-stakes situations involving lethal force, sensitive information or government surveillance.

The move is likely to benefit Elon Musk's competing chatbot, Grok, which the Pentagon plans to give access to classified military networks, and could serve as a warning to two other competitors, Google and OpenAI, that also have contracts to supply their AI tools to the military.

Anthropic, maker of the chatbot Claude, could afford to lose the contract. But an ultimatum this week from Defense Secretary Pete Hegseth posed broader risks at the peak of the company's meteoric rise from a little-known computer science research lab in San Francisco to one of the world's most valuable startups.

Anthropic spurned Pentagon's final proposal over its safeguards

If Amodei didn't budge, military officials had said they would not just pull Anthropic's contract but also "deem them a supply chain risk," a designation typically stamped on foreign adversaries that could derail the company's critical partnerships with other businesses.

Trump didn't make such a designation in his announcement Friday but said Anthropic could face "major civil and criminal consequences" if it's not helpful in the phase-out period. Anthropic didn't immediately reply to a request for comment on Trump's remarks.

And if Amodei had caved, he could have lost trust in the booming AI industry, particularly from top talent drawn to the company for its promises of responsibly building better-than-human AI that, without safeguards, could pose catastrophic dangers.

Anthropic had said it sought narrow assurances from the Pentagon that Claude won't be used for mass surveillance of Americans or in fully autonomous weapons. But after months of private talks exploded into public debate, it said in a Thursday statement that new contract language "framed as compromise was paired with legalese that would allow those safeguards to be disregarded at will."

That was after Sean Parnell, the Pentagon's top spokesman, posted on social media that the military "has no interest in using AI to conduct mass surveillance of Americans (which is illegal) nor do we want to use AI to develop autonomous weapons that operate without human involvement."

He emphasized that the Pentagon wants to "use Anthropic's model for all lawful purposes," but he and other officials haven't detailed how they want to use the technology.

Dispute further polarizes the tech industry

In Silicon Valley, where a growing number of tech workers from Anthropic's top rivals, OpenAI and Google, voiced support for Amodei's stand late Thursday in an open letter.

OpenAI and Google, along with Musk's xAI, also have contracts to supply their AI models to the military.

Musk sided with Trump's Republican administration on Friday, saying on his social media platform X that "Anthropic hates Western Civilization." All of the leading AI models, including Musk's Grok and OpenAI's ChatGPT, are programmed with a set of instructions that guide a chatbot's values and behavior. Anthropic calls that guidance a constitution.

While some Trump-allied tech leaders have joined the fray — including Musk and Palmer Luckey, co-founder of defense contractor Anduril — the polarizing debate over "woke AI" has put others in a difficult position.

"The Pentagon is negotiating with Google and OpenAI to try to get them to agree to what Anthropic has refused," the open letter from some OpenAI and Google employees says. "They're trying to divide each company with fear that the other will give in."

But in a surprise move from one of Amodei's fiercest rivals, OpenAI CEO Sam Altman on Friday sided with Anthropic and questioned the Pentagon's "threatening" move in a CNBC interview, suggesting that OpenAI and most of the AI field share the same red lines. Amodei once worked for OpenAI before he and other OpenAI leaders quit to form Anthropic in 2021.

"For all the differences I have with Anthropic, I mostly trust them as a company, and I think they really do care about safety," Altman told CNBC. "I've been happy that they've been supporting our warfighters. I'm not sure where this is going to go."

Some lawmakers and a retired Pentagon AI leader push back

Also raising concerns about the Pentagon's approach were some lawmakers and a former leader of the Defense Department's AI initiatives.

Sen. Mark Warner of Virginia, the top Democrat on the Senate Intelligence Committee, said the move "combined with inflammatory rhetoric attacking that company, raises serious concerns about whether national security decisions are being driven by careful analysis or political considerations."

Retired Air Force Gen. Jack Shanahan wrote on a social media that "painting a bullseye on Anthropic garners spicy headlines, but everyone loses in the end."

Shanahan said Claude is already being widely used across the government, including in classified settings, and Anthropic's red lines are "reasonable." He said the AI large language models that power chatbots like Claude are also "not ready for prime time in national security settings," particularly not for fully autonomous weapons.

"They're not trying to play cute here," he wrote Thursday on LinkedIn.

When Hegseth and Amodei met on Tuesday, military officials warned that they could designate Anthropic as a supply chain risk, cancel its contract or invoke a Cold War-era law called the Defense Production Act to give the military more sweeping authority to use its products, even if the company doesn't approve.

Amodei had said Thursday that "those latter two threats are inherently contradictory: one labels us a security risk; the other labels Claude as essential to national security." He said he hoped the Pentagon would reconsider given Claude's value to the military, but, if not, Anthropic "will work to enable a smooth transition to another provider."