US President Donald Trump announced on Friday that he will direct all federal agencies to immediately stop using technology from the AI company Anthropic, escalating tensions between the government and the Silicon Valley startup.
Trump took to Truth Social to declare: "We don't need it, we don't want it, and will not do business with them again!" His announcement comes after a standoff with the White House and Pentagon over military access to Anthropic’s AI tools.
The dispute began when Anthropic resisted demands from the US Department of Defense to grant unrestricted access to its systems. Pentagon Secretary Pete Hegseth described Anthropic as a "supply chain risk," a designation that could be the first of its kind for an American company.
Anthropic responded, saying it "will challenge any supply chain risk designation in court."
The conflict intensified after weeks of private and public exchanges between Anthropic CEO Dario Amodei and Hegseth. The company expressed concerns about government use of its AI, such as Claude, for "mass surveillance" or "fully autonomous weapons."
Hegseth and the Pentagon insisted that Anthropic must accept "any lawful use" of its technology.
Both Trump and Hegseth communicated their decisions through social media. Hegseth stated on X that Anthropic would be immediately classified as a supply chain risk, preventing any military contractors from working with the company.
Anthropic said Friday evening it had not received any formal communication from the White House or military regarding the outcome of negotiations.
"Being designated a supply chain risk would both be legally unsound and set a dangerous precedent for any American company that negotiates with the government," the company said.
"No amount of intimidation or punishment from the Department of War will change our position on mass domestic surveillance or fully autonomous weapons."
Trump referred to the Pentagon as the Department of War and said that Anthropic’s AI tools would be phased out of government use over the next six months.
He also warned the company on Truth Social: "Anthropic better get their act together, and be helpful during this phase out period, or I will use the Full Power of the Presidency to make them comply, with major civil and criminal consequences to follow."
Anthropic has been supplying AI to US government agencies since 2024, including classified work, and its cooperation with the Pentagon is part of a $200 million contract.
The company indicated that the only clients affected by the phase-out will be those working on military projects. Anthropic pledged to "enable a smooth transition to another provider" if the government stops using its AI.
The standoff has drawn industry attention. OpenAI CEO Sam Altman expressed support for Amodei, noting in an internal memo that OpenAI would also reject military uses that are "unlawful or unsuited to cloud deployments, such as domestic surveillance and autonomous offensive weapons."
Altman added, "But regardless of how we got here, this is no longer just an issue between Anthropic and the [Department of War]; this is an issue for the whole industry and it is important to clarify our stance."
The dispute followed meetings in Washington between Hegseth and Amodei, culminating in two conflicting ultimatums: either allow the Pentagon full access or face legal and operational consequences, including potential use of the Defense Production Act.
Amodei chose to stand firm, saying he would rather end work with the Pentagon than surrender to the demands.
A former Department of Defense official, speaking anonymously, suggested that Anthropic holds the advantage in this fight. "This is great PR for them and they simply do not need the money," the source said. The official also criticized the Pentagon’s legal reasoning for the threats, calling it "extremely flimsy."
Anthropic’s most recent valuation, announced earlier this month, puts the company at $380 billion, reflecting both current revenue and expected future earnings. The standoff marks a rare clash between a US tech company and the federal government over AI ethics and military use, with potential implications for the broader industry.
