US President Donald Trump has ordered every federal agency to halt the use of technology from Anthropic. He announced the move 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.
The decision marks a dramatic escalation in a dispute between the White House and the AI developer. Anthropic refused to grant the US military unrestricted access to its artificial intelligence systems. Defense Secretary Pete Hegseth responded by declaring the company a “supply chain risk.” No American firm has ever received that designation in public before.
Anthropic said it will challenge any such classification in court. The company argued that the step would lack legal justification and set a dangerous precedent for US businesses negotiating with federal authorities.
Pentagon Pushes for Unrestricted AI Use
The confrontation intensified after days of public and private exchanges between Anthropic chief executive Dario Amodei and Hegseth. Anthropic voiced concern in recent months about potential government applications of its AI tools. The company warned against mass domestic surveillance and fully autonomous weapons.
Hegseth and Pentagon officials insisted that Anthropic must accept “any lawful use” of its technology. Hegseth wrote on X that the government would immediately impose the supply chain risk label. That action would block any defense contractor from conducting commercial business with Anthropic.
Anthropic said Friday evening that it had not received formal communication from the White House or the military about the status of negotiations. The company nonetheless rejected the pressure. “No amount of intimidation or punishment from the Department of War will change our position on mass domestic surveillance or fully autonomous weapons,” Anthropic stated.
Trump refers to the Defense Department as the “Department of War.”
Government Orders Six-Month Exit
Trump directed agencies to remove Anthropic’s tools from all federal operations within six months. Anthropic said the ruling will mainly affect companies that also maintain military contracts. Those firms may need to discontinue the use of Anthropic systems for defense-related assignments.
Before Trump issued his order, Anthropic pledged to support a smooth transition if the Defense Department ended cooperation.
Trump sharply criticized the company on social media. He warned that Anthropic must cooperate during the phase-out period. He threatened to use the “Full Power of the Presidency” to compel compliance. He cited possible civil and criminal consequences if the company resisted.
Anthropic has supplied AI systems to US government and military agencies since 2024. It became the first advanced AI developer to deploy tools in agencies handling classified material.
Rival OpenAI Signals Similar Limits
The dispute drew reactions across the AI industry. Sam Altman, chief executive of OpenAI, expressed support for Amodei’s position. He told employees that OpenAI maintains comparable red lines for military applications.
In an internal memo, Altman wrote that OpenAI would reject any military use that violates the law or exceeds cloud deployment limits. He cited domestic surveillance and autonomous offensive weapons as unacceptable. He later confirmed on X that OpenAI reached an agreement with the Department of War to deploy its AI models on classified cloud networks.
Amodei built his profile as an early OpenAI executive. He left the company with several colleagues after disputes with Altman. The group founded Anthropic and now competes directly with OpenAI for enterprise and government clients. Both firms develop AI chatbots, agents, and enterprise software.
Altman said he does not fully understand how the conflict escalated. He questioned Anthropic’s earlier arrangement with the Pentagon and Palantir Technologies. He stressed that the issue now extends beyond one company and affects the entire AI sector.
Legal Threats and High Stakes
Hegseth summoned Amodei to Washington, DC on Tuesday as tensions mounted. The meeting ended with two ultimatums if Anthropic refused full access. 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 reiterated his intention to impose the supply chain risk designation.
By Thursday, Amodei declared that he would rather end cooperation with the Pentagon than accept those terms.
A former Defense Department official said Anthropic appears to hold the stronger position in the dispute. The former official argued that the confrontation generates positive publicity for the company. He added that Anthropic does not rely financially on the $200 million Pentagon contract.
Anthropic recently secured a valuation of $380 billion. Analysts based the figure on current revenue and projected future earnings.
The former official described the Pentagon’s legal basis for its threats as extremely weak. He said the plan to invoke the Defense Production Act or impose the supply chain risk label rests on flimsy grounds.
