Anthropic faces federal ban as Pentagon shifts to OpenAI

US President Trump has directed federal agencies to cease the use of all Anthropic products. Following the directive, Secretary of Defense Pete Hegseth instructed the Department of Defense—which he referred to as the Department of War—to designate Anthropic a Supply-Chain Risk to National Security. The designation, which takes effect immediately, bars any contractor, supplier, or partner doing business with the United States military from conducting commercial activity with Anthropic. President Trump stated on Truth Social that the government does not need or want Anthropic’s products and will not do business with the company again.

The dispute between the US government and Anthropic stems from the company’s refusal to allow its AI models to be used for mass domestic surveillance or fully autonomous weapons. To manage the transition, the president allowed for a six-month phase-out period for federal agencies currently using Anthropic products. “Our strong preference is to continue to serve the Department and our warfighters — with our two requested safeguards in place,” said Dario Amodei, CEO of Anthropic. Amodei added on Thursday that the company would work to enable a smooth transition to another provider to avoid disrupting military operations. On Friday, Anthropic stated that it will challenge the supply-chain risk designation in court.

OpenAI has moved to fill the vacancy, announcing a deal with the Pentagon. According to the New York Times, OpenAI and the government began meeting about a potential tie-up on Wednesday. OpenAI CEO Sam Altman reportedly sent a memo to staff on Thursday stating that he shared the same red lines and that OpenAI’s defense contracts would reject uses that were unlawful or unsuited to cloud deployments, such as domestic surveillance and autonomous offensive weapons. OpenAI co-founder Ilya Sutskever, who fell out with Altman in November 2023, wrote on X on Friday that it is extremely good that Anthropic has not backed down and significant that OpenAI has taken a similar stance.

The shift reshapes the defense AI landscape established last July, when Anthropic, OpenAI, and Google each received contract awards from the US Department of Defense. While Google has yet to comment, the federal ban on Anthropic marks a realignment of how the United States military procures AI technologies.

Why it matters

The Pentagon’s move to blacklist Anthropic while immediately pivoting to OpenAI signals a rigid new standard for defense AI procurement, where companies must balance national security requirements with their own ethical red lines.