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 directive escalates a tense standoff between the White House and the AI company. Anthropic refused to grant the US military unrestricted access to its AI systems. Defense Secretary Pete Hegseth labeled the company a “supply chain risk,” a designation never before publicly applied to a US firm.
Anthropic said it will challenge any such designation in court. The company warned the move lacks legal basis and could set a dangerous precedent for businesses negotiating with the federal government.
Military Access Sparks Showdown
The dispute intensified after days of tense discussions between Anthropic CEO Dario Amodei and Hegseth. Anthropic expressed concern about government use of its AI tools, warning against mass domestic surveillance and fully autonomous weapons.
Hegseth and Pentagon officials insisted Anthropic accept “any lawful use” of its technology. He announced on X that the supply chain risk designation would take effect immediately. That step would prevent 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 military about negotiations. The company rejected the pressure campaign. “No amount of intimidation or punishment from the Department of War will change our position on mass domestic surveillance or fully autonomous weapons,” it said.
Trump uses “Department of War” as an alternate name for the Defense Department.
Six-Month Federal Phase-Out
Trump directed agencies to remove Anthropic’s systems from all federal projects within six months. Anthropic said the decision primarily affects companies that also hold Pentagon contracts, which may need to discontinue Anthropic tools for defense-related work.
Before Trump issued the directive, Anthropic pledged to enable a smooth transition if the Defense Department selected another provider.
Trump criticized the company on social media. He warned that Anthropic must cooperate during the phase-out. He threatened to use the “Full Power of the Presidency” to enforce compliance and cited potential civil and criminal consequences.
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 operations.
OpenAI Confirms Similar Military Limits
The standoff triggered reactions across the technology sector. Sam Altman, chief executive of OpenAI, expressed support for Amodei’s stance. He told employees OpenAI maintains similar limits on military use.
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 colleagues after disagreements with Altman. They founded Anthropic and now compete directly with OpenAI for enterprise and government clients. Both firms develop AI chatbots, agents, and enterprise 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 Industry Stakes
Hegseth summoned Amodei to Washington, DC, on Tuesday as tensions rose. The meeting ended with two ultimatums if Anthropic refused full access. Hegseth threatened to invoke the Defense Production Act, allowing the government to use Anthropic’s products at its discretion. He also reiterated plans to apply 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 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 impose the supply chain risk label rest on fragile grounds.
