By Swetha Anil Kumar
President Donald Trump ordered every federal agency to immediately stop using artificial intelligence tools made by Anthropic, the San Francisco-based company behind the Claude AI model.
The fallout began over a contract dispute that had been simmering for months and finally exploded on Friday, February 27.
The Pentagon, which uses Claude on its classified military networks, wanted the right to use the technology for “all lawful purposes.” Anthropic CEO Dario Amodei had two firm conditions: Claude would not be used in fully autonomous weapons, where AI, not a human, decides to pull the trigger, and it would not be used for the mass surveillance of American citizens.
The two sides could not agree. Anthropic said the Pentagon’s latest contract language, framed as a compromise, contained legal wording that would allow their safeguards to be “disregarded at will.” The Pentagon set a deadline of 5:01 p.m. on Friday for Anthropic to back down. It didn’t.
Trump ordered every federal agency to “immediately cease” using Anthropic’s technology, calling the company “radical left” and “woke.” Defence Secretary Pete Hegseth went further, declaring Anthropic a “Supply-Chain Risk to National Security”, a label typically reserved for foreign adversaries like China’s Huawei, and ordered that any company doing business with the U.S. military must certify they are not using Anthropic’s products.
The stakes are enormous. Claude is the only AI currently deployed on the military’s classified networks, and was reportedly used in the operation to capture Venezuelan President Nicolás Maduro. Losing it, one defence official admitted, would be a “huge pain.” The contract being torn up was worth up to $200 million.
Agencies have six months to phase out Claude. Meanwhile, rival OpenAI quickly struck a deal with the Pentagon that reportedly includes the same safeguards Anthropic had demanded. Anthropic says it will challenge the national security designation in court, calling it “legally unsound” and a dangerous precedent for any American company that dares to negotiate with its government.
Senator Mark Warner of Virginia warned the move raised serious concerns about whether the decision was driven by genuine national security analysis or politics.