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 move intensifies a major clash between the White House and the AI company. Anthropic refused to grant the US military unrestricted access to its artificial intelligence tools. Defense Secretary Pete Hegseth labeled the firm a “supply chain risk,” a designation never before publicly applied to a US company.
Anthropic said it will challenge any such designation in court. The company warned that the move would lack legal basis and set a dangerous precedent for firms negotiating with the federal government.
Conflict Over Military Control of AI
The dispute escalated after days of public and private exchanges between Anthropic chief executive Dario Amodei and Hegseth. Anthropic voiced concern about potential government uses of its AI tools, citing risks of mass domestic surveillance and fully autonomous weapons.
Hegseth and Pentagon officials insisted that Anthropic accept “any lawful use” of its technology. He announced on X that the company would immediately receive the supply chain risk designation. The label would prevent any defense contractor from conducting commercial activity with Anthropic.
Anthropic said Friday evening it had not received formal notice from the White House or military about the 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 refers to the Defense Department as the “Department of War.”
Federal Agencies to Phase Out Anthropic AI
Trump ordered agencies to remove Anthropic’s systems from all government work within six months. Anthropic said the decision primarily affects companies that also hold Pentagon contracts, which may need to stop using its tools for defense projects.
Before Trump’s announcement, Anthropic pledged to enable a smooth transition if the Defense Department chose another provider.
Trump criticized the company on social media, warning it must cooperate during the phase-out. He 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 Supports Similar Limits
The standoff drew reactions across the tech industry. Sam Altman, chief executive of OpenAI, expressed support for Amodei’s stance. He told employees that OpenAI maintains similar limits on military applications.
In an internal memo, Altman said OpenAI would reject any military use that violates the law or exceeds cloud deployment limits. He specifically 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 corporate and government clients. Both firms develop AI chatbots, agents, and enterprise tools.
Altman said he does not fully understand how the dispute escalated. He questioned Anthropic’s earlier arrangement with the Pentagon and Palantir Technologies. He stressed that the conflict now affects the entire AI industry.
Legal Pressure and High 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, which would allow the government to use Anthropic’s products at its discretion. He also reiterated plans to apply the supply chain risk label.
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 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 flimsy grounds.
