US President Donald Trump has ordered every federal agency to immediately stop using technology from Anthropic. He announced the directive on Truth Social on Friday. “We don’t need it, we don’t want it, and will not do business with them again!” Trump wrote.
Anthropic faces a deepening conflict with the White House. The company refused to grant the US military unrestricted access to its AI tools. Defense Secretary Pete Hegseth responded by labeling Anthropic a “supply chain risk.” That designation would make Anthropic the first US company to receive such public treatment.
Anthropic said it will challenge any supply chain risk designation in court. The company warned that the move would lack legal basis and create a dangerous precedent for firms negotiating with the government.
White House and Pentagon Clash With AI Firm
Trump issued his directive after days of public and private exchanges between Anthropic CEO Dario Amodei and Hegseth. Anthropic grew concerned in recent months about potential government use of its AI systems. The company cited fears of mass surveillance and fully autonomous weapons.
Hegseth and the Pentagon insisted that Anthropic must accept “any lawful use” of its tools and technology. Hegseth wrote on X that the government would immediately designate Anthropic a supply chain risk. The decision would prohibit any military contractor from engaging in commercial activity with the company.
Anthropic said Friday evening that it had not received formal notice from the White House or the military about the status of negotiations. The company nevertheless warned that intimidation would not change its position. “No amount of intimidation or punishment from the Department of War will change our position on mass domestic surveillance or fully autonomous weapons,” Anthropic said.
Trump uses “Department of War” as an alternative name for the Defense Department.
Phase-Out Plan and Industry Fallout
Trump said the government will phase out Anthropic’s tools from all federal work within six months. Anthropic said the decision will mainly affect companies that also hold military contracts. Those firms may need to stop using Anthropic products for defense-related projects.
Before Trump’s announcement, Anthropic said it would enable a smooth transition to another provider if the Defense Department stopped using its tools.
Trump sharply criticized the company on Truth Social. He warned that Anthropic “better get their act together” during the phase-out period. He threatened to use the “Full Power of the Presidency” to enforce compliance, citing potential civil and criminal consequences.
Anthropic has worked with the US government and military since 2024. It became the first advanced AI company to deploy tools in agencies handling classified work.
OpenAI Weighs In as Rivalry Intensifies
Anthropic received public support after Trump’s decision. Sam Altman, chief executive of OpenAI, backed Amodei’s stance. He told staff that OpenAI maintains similar red lines regarding military applications.
In a company memo, Altman wrote that OpenAI would reject any military uses that violate the law or exceed cloud deployment limits. He cited domestic surveillance and autonomous offensive weapons as unacceptable applications. He later confirmed on X that OpenAI reached a deal with the Department of War to deploy its AI models on classified cloud networks.
Amodei built his reputation as an early OpenAI employee. He left the company with several colleagues after disagreements with Altman. The group founded Anthropic and now competes directly with OpenAI for corporate and government clients. Both startups develop AI chatbots, agents, and related tools.
Altman acknowledged uncertainty about the origins of the dispute. He wrote that he did not fully understand how events escalated. He questioned Anthropic’s earlier agreement with the Pentagon and Palantir Technologies. He stressed that the conflict now affects the entire AI industry.
High-Stakes Showdown in Washington
Hegseth summoned Amodei to Washington, DC on Tuesday as tensions rose. The meeting ended with two ultimatums if Anthropic refused full access to its tools. Hegseth threatened to invoke the Defense Production Act. That law would allow the government to use Anthropic’s products as it sees fit. He also pledged to designate the company a supply chain risk.
By Thursday, Amodei said he would rather end cooperation with the Pentagon than accept those conditions.
A former Defense Department official said Anthropic appears to hold the upper hand in the dispute. The former official argued that the confrontation generates positive publicity for the company. He added that Anthropic does not depend on the military contract financially.
Anthropic’s Pentagon work forms part of a $200 million contract. The company secured a recent valuation of $380 billion earlier this month. Analysts based the figure on current revenue and projected earnings.
The former official described the Defense Department’s legal grounds as extremely weak. He said the threats to invoke the Defense Production Act or apply the supply chain risk label rest on flimsy justification.
