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.
The move intensifies a fierce conflict 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 reacted by designating the company a “supply chain risk.” No US firm has ever received that label in public before.
Anthropic said it will challenge any designation in court. The company argued that the step would lack legal grounds and create a dangerous precedent for American businesses negotiating with the federal government.
Pentagon Presses for Full Control Over AI Tools
The dispute escalated after days of tense exchanges between Anthropic chief executive Dario Amodei and Hegseth. Anthropic raised concerns in recent months about possible government uses of its AI products. The company warned against mass domestic surveillance and fully autonomous weapons systems.
Hegseth and Pentagon officials insisted that Anthropic must accept “any lawful use” of its technology. Hegseth announced on X that the government would immediately apply the supply chain risk label. That designation would prohibit any military contractor from conducting commercial activity with Anthropic.
Anthropic said on 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 said.
Trump refers to the Defense Department as the “Department of War.”
Six-Month Withdrawal From Government Projects
Trump directed agencies to phase out Anthropic’s tools from all federal operations within six months. Anthropic said the decision will mainly affect companies that also hold Pentagon contracts. Those firms may need to discontinue Anthropic systems for defense-related assignments.
Before Trump’s announcement, Anthropic pledged to ensure a smooth transition if the Defense Department chose another provider.
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 enforce compliance. He cited potential civil and criminal consequences if the company failed to comply.
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 work.
OpenAI Signals Similar Boundaries
The standoff triggered reactions across the technology industry. Sam Altman, chief executive of OpenAI, expressed support for Amodei’s position. He told employees that OpenAI maintains similar red lines 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 its AI models on classified cloud networks.
Amodei built his reputation as an early OpenAI executive. 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 companies develop AI chatbots, agents, and enterprise tools.
Altman wrote that 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 sector.
Legal Threats Raise Industry Concerns
Hegseth summoned Amodei to Washington, DC on Tuesday as tensions mounted. The meeting ended with two ultimatums if Anthropic refused to grant full access. Hegseth threatened to invoke the Defense Production Act. That law would allow the government to use Anthropic’s products at its discretion. He also reiterated his intention to impose the supply chain risk designation.
By Thursday, Amodei said he would rather end cooperation with the Pentagon than accept those demands.
A former Defense Department official said Anthropic appears to hold the stronger position. The former official argued that the confrontation generates positive publicity for the company. He 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 impose the supply chain risk label rest on flimsy arguments.
