US President Donald Trump has ordered every federal agency 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 deepening confrontation between the White House and the AI company. Anthropic refused to grant the US military unrestricted access to its artificial intelligence systems. Defense Secretary Pete Hegseth responded by designating the firm a “supply chain risk.” No American company has ever faced that label publicly before.
Anthropic said it will challenge any such designation in court. The company argued that the move would lack legal grounds and create a dangerous precedent for US businesses negotiating with Washington.
Dispute Over Military Control of AI
The conflict intensified after days of tense exchanges between Anthropic chief executive Dario Amodei and Hegseth. Anthropic raised concerns in recent months about potential government uses 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 designation. That action would prohibit defense contractors from engaging in commercial activity with Anthropic.
Anthropic said Friday evening that it had not received formal notice from the White House or the military regarding 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.”
Federal Agencies Begin Six-Month Exit
Trump directed agencies to remove Anthropic’s systems from all government work within six months. Anthropic said the decision will mainly affect companies that also maintain Pentagon contracts. Those firms may need to discontinue Anthropic products for defense-related assignments.
Before Trump issued his directive, Anthropic pledged to support a smooth transition if the Defense Department selected 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 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 projects.
OpenAI Backs Red Lines on Military Use
The standoff drew reactions across the technology industry. Sam Altman, chief executive of OpenAI, expressed support for Amodei’s stance. 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 its AI models on classified cloud networks.
Amodei gained prominence 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 enterprise and government customers. 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 sector.
Legal Pressure and High Financial 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 at its discretion. He also reiterated his intention to apply the supply chain risk designation.
By Thursday, Amodei said 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 depend 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 fragile arguments.
