Trump orders federal agencies to halt use of Anthropic AI amid Pentagon dispute

U.S. President Donald Trump has directed all federal agencies to stop using artificial intelligence tools developed by Anthropic, escalating a public standoff between the White House and the AI company over how its technology can be used by the military.

In a post on Truth Social, Trump said the government would immediately cease using Anthropic’s technology and phase it out over six months. He added that the administration would not continue doing business with the company and warned of consequences if it failed to cooperate during the transition.

The move followed days of back-and-forth between Anthropic and the Pentagon over restrictions embedded in the company’s AI model, Claude. As per reports, the Defence Department had asked the company to allow its systems to be used for “all lawful purposes” under a military contract reportedly worth up to $200 million.

Anthropic refused to remove safeguards preventing the use of its models for mass domestic surveillance and fully autonomous weapons.

Soon, Defence Secretary Pete Hegseth announced that Anthropic would be designated a “supply chain risk to national security,” a move that effectively bars the company from doing business with the U.S. military and could restrict contractors from engaging with it on defence-related work.

Anthropic reportedly said it would challenge the designation in court. The company argued that such a label would be legally unsound and affect how private firms negotiate terms with the government. It maintained that it supports lawful national security applications of AI, except in the two disputed areas.

CEO Dario Amodei said the company could not agree to the Pentagon’s demands. He stated that current frontier AI systems are not reliable enough to be safely used in fully autonomous weapons and that mass domestic surveillance of Americans would violate fundamental rights.

Pentagon officials, however, said existing laws and policies already prohibit unlawful uses of AI and argued that the military must retain unrestricted access to tools for any lawful purpose. Hours after Trump’s order, rival AI firm OpenAI said it had reached an agreement with the Defence Department to deploy its AI models on classified networks.

According to reports, CEO Sam Altman stated that the agreement includes safeguards such as prohibitions on domestic mass surveillance and requirements for human oversight in the use of force, principles he said are reflected in existing law and policy.

The dispute marks a rare and highly public clash between a major defence contractor and the Pentagon. The decision comes as Anthropic prepares for a public offering. While its Pentagon contract represents a relatively small portion of its overall revenue, the broader implications of the confrontation, including investor reaction and future government partnerships, remain uncertain.

Despite the directive to phase out Anthropic’s systems, reports indicate that the company’s AI tools continued to be used in U.S. military operations during the ongoing conflict involving Iran.

According to reports, Anthropic’s Claude system was employed for intelligence analysis, target identification and battlefield simulations in operations linked to the Iran theatre, even after Trump’s announcement. 

The administration has outlined a six-month transition period to replace Anthropic’s systems with alternative providers.