US President Donald Trump has ordered all federal agencies 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 order marks a sharp escalation in a growing confrontation between the White House and the AI developer. Anthropic refused to grant the US military unrestricted access to its artificial intelligence tools. Defense Secretary Pete Hegseth responded by declaring the company a “supply chain risk.” No American company has ever received that designation publicly before.
Anthropic said it will challenge any such classification in court. The company argued that the move would lack legal foundation and set a troubling precedent for firms negotiating with the federal government.
Pentagon Pushes for Full Military Access
The dispute intensified after days of public and private exchanges between Anthropic chief executive Dario Amodei and Hegseth. Anthropic expressed concern in recent months about potential government uses of its AI systems. 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 step 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 about the status of negotiations. The company nonetheless 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,” Anthropic said.
Trump refers to the Defense Department as the “Department of War.”
Agencies Ordered to Phase Out AI Tools
Trump instructed federal agencies to remove Anthropic’s systems from all government operations within six months. Anthropic said the decision will primarily affect companies that also hold 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 transition period. He threatened to use the “Full Power of the Presidency” to compel compliance. He cited possible civil and criminal consequences if the company failed to comply.
Anthropic has supplied AI tools to US government and military agencies since 2024. It became the first advanced AI developer to deploy systems in agencies handling classified work.
OpenAI Signals Parallel Red Lines
The standoff prompted reactions across the technology sector. Sam Altman, chief executive of OpenAI, voiced support for Amodei’s position. He told employees that OpenAI maintains similar limits on military applications.
In an internal memo, Altman wrote that OpenAI would reject any military use that violates the law or exceeds cloud deployment restrictions. 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 clients. 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 industry.
Legal Threats Raise Stakes in Washington
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 plan 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 in the dispute. The former official argued that the confrontation generates favorable 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 arguments as extremely weak. He said the threats to invoke the Defense Production Act or impose the supply chain risk label rest on flimsy justification.
