US President Donald Trump has ordered all federal agencies to immediately stop using technology from Anthropic. He announced the decision 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 order escalates a sharp confrontation 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 labeling the company a “supply chain risk,” a designation never before publicly applied to a US firm.
Anthropic said it will challenge any such classification in court. The company warned that the move lacks legal basis and could set a dangerous precedent for American businesses negotiating with the federal government.
Dispute Over Military Control of AI
The clash intensified after days of tense exchanges between Anthropic CEO Dario Amodei and Hegseth. Anthropic voiced concern over potential government uses of its AI tools, highlighting risks of mass domestic surveillance and fully autonomous weapons.
Hegseth and Pentagon officials insisted that Anthropic accept “any lawful use” of its technology. Hegseth announced on X that the supply chain risk designation would be applied immediately. That step would prevent any defense contractor from engaging in commercial activity with Anthropic.
Anthropic said Friday evening that it had not received formal notice from the White House or military regarding negotiations. The company rejected the pressure campaign, stating: “No amount of intimidation or punishment from the Department of War will change our position on mass domestic surveillance or fully autonomous weapons.”
Trump uses “Department of War” as an alternate name for the Defense Department.
Federal Agencies Face Six-Month Phase-Out
Trump ordered agencies to remove Anthropic’s systems from all federal operations within six months. Anthropic said the decision will primarily affect companies that also hold Pentagon contracts, which may need to discontinue Anthropic tools for defense projects.
Before Trump issued his directive, Anthropic pledged to enable a smooth transition if the Defense Department selected another provider.
Trump criticized the company sharply on social media. He warned that Anthropic must cooperate during the phase-out period and threatened to use the “Full Power of the Presidency” to enforce compliance, citing potential civil and criminal consequences.
Anthropic has supplied AI systems to US government and military agencies since 2024. It became the first advanced AI company to deploy tools in agencies handling classified operations.
OpenAI Backs Similar Limits on Military Use
The standoff drew reactions across the technology sector. Sam Altman, chief executive of OpenAI, expressed support for Amodei’s position. He told employees that OpenAI maintains similar boundaries regarding 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 AI models on classified cloud networks.
Amodei rose to prominence as an early OpenAI executive. He left the company with several colleagues after disagreements with Altman. They founded Anthropic and now compete directly with OpenAI for enterprise and government clients. Both companies develop AI chatbots, agents, and corporate tools.
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 dispute now affects the entire AI industry.
Legal Pressure and High-Stakes Showdown
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, which would allow the government to use Anthropic’s products at its discretion. He also reiterated plans to impose the supply chain risk designation.
By Thursday, Amodei said he would rather end cooperation with the Pentagon than comply with the demands.
A former Defense Department official said Anthropic appears to hold the stronger position. The official argued that the confrontation provides positive publicity and added that Anthropic does not rely heavily 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 justification as extremely weak. He said the threats to invoke the Defense Production Act or apply the supply chain risk label rest on fragile grounds.
