Trump orders government to stop using Anthropic in battle over AI use

Source: BBC Technology

23 minutes ago
Kali Hays, Technology reporter
Lily Jamali, North America Technology correspondent

Reuters

US President Donald Trump said Friday he would direct every federal agency to immediately stop using technology from AI developer Anthropic.

“We don’t need it, we don’t want it, and will not do business with them again!” – Trump, Truth Social post

Anthropic is mired in a row with the White House after refusing demands that it give the US military unfettered access to its AI tools. The refusal led US Secretary of Defense Pete Hegseth to say he’s deemed Anthropic a “supply chain risk.”

• The label would make Anthropic the first US company ever publicly designated as such.
• The company said Friday night it “will challenge any supply chain risk designation in court.”

Trump’s directive came after days of back‑and‑forth, in public and private, between the company’s CEO Dario Amodei and Hegseth.

Anthropic’s concerns

• The company has grown worried that the government could use its AI tools (e.g., Claude) for mass surveillance and fully autonomous weapons.
• Hegseth and the Pentagon have insisted Anthropic agree to “any lawful use” of its tools and technology.

Both Trump and Hegseth announced their decisions on social media. The defence secretary said on X that Anthropic would be “immediately” designated a supply chain risk, prohibiting any business working with the military from any commercial activity with Anthropic.

Anthropic said Friday evening it had yet to hear anything directly from the White House or the military “on the status of our negotiations.”

Nevertheless, the company warned that being designated a supply chain risk “would both be legally unsound and set a dangerous precedent for any American company that negotiates with the government.”

“No amount of intimidation or punishment from the Department of War will change our position on mass domestic surveillance or fully autonomous weapons,” the company added.

The “Department of War” is a secondary name Trump has given to the Defence Department.

Phase‑out timeline

• Anthropic’s tools will be phased out of all government work over the next six months, Trump said.
• The only impact on Anthropic’s other customers will be on companies that also contract with the military; those firms may have to stop using Anthropic for work done on behalf of the department.

Prior to Trump’s pronouncement, Anthropic said that if the US Department of Defense chose to stop using its tools, the company would “work to enable a smooth transition to another provider.”

Trump berated the company on his Truth Social platform, saying Anthropic “better get their act together, and be helpful during this phase‑out period, or I will use the Full Power of the Presidency to make them comply, with major civil and criminal consequences to follow.”

Anthropic has been in use by the US government and military since 2024 and was the first advanced‑AI company to have its tools deployed in agencies doing classified work.

Industry reaction

OpenAI boss Sam Altman offered support to rival AI executive Amodei. In a note to staff, Altman said he shared the same “red lines” regarding the application of the firms’ products.

“Any OpenAI contracts for the military would also reject uses that were ‘unlawful or unsuited to cloud deployments, such as domestic surveillance and autonomous offensive weapons.’”

Amodei, a long‑time figure in tech who rose to prominence as an early employee of OpenAI, left the company with several colleagues to found Anthropic after disagreements with Altman. The two startups now compete directly for users and corporate customers with evolving AI chatbots, agents, and other tools.

“I do not fully understand how things got here; I do not know why Anthropic did their deal with the Pentagon and Palantir in the way they originally did it,” Altman wrote.
“But regardless of how we got here, this is no longer just an issue between Anthropic and the [Department of War] DoW; this is an issue for the whole industry and it is important to clarify our stance.”

Escalation

• Hegseth called Amodei to Washington, DC, for a meeting amid growing tensions.
• The meeting culminated in two contradictory ultimatums if Anthropic refused to grant the department free rein of its tools.
• Hegseth said he would invoke the Defense Production Act, allowing the government to use Anthropic’s products as it saw fit, and deem it a “supply chain risk.”

By Thursday, Amodei said he would rather stop working with the Pentagon than acquiesce to such threats.

A former DoD official (who asked not to be named) told the BBC that Anthropic appeared to have the upper hand in the fight.

“This is great PR for them and they simply do not need the money,” the former official said.

Anthropic’s work with the Pentagon is part of a contract worth $200 million. The company’s most recent valuation, announced earlier this month, put its worth at $380 billion, based on current revenue and future expected earnings.

The former official added that the Defence Department’s basis for threatening Anthropic with invoking either the Defense Production Act or labeling it a supply chain risk was… (article continues).

“extremely flimsy”.