U.S. War Department Nears Finalizing Move to Cut Ties with AI Firm Anthropic

The U.S. War Department is nearing a decision to sever business relationships with Anthropic, potentially labeling the AI firm as a “supply chain risk.”

Such an action would require any U.S. military contractor to discontinue using Anthropic’s technology or be excluded from Pentagon contracts.

Senior defense officials are close to finalizing a downgrade in the military’s relationship with Anthropic following months of contentious negotiations. A senior defense official stated bluntly that “it will be an enormous pain in the ss to disentangle, and we are going to make sure they pay a price for forcing our hand like this.”

The designation of a “supply chain risk” is typically reserved for foreign adversaries and hostile actors, making the potential penalty for Anthropic’s stance unusually severe for a domestic tech company.

A Pentagon spokesperson indicated that military AI partnerships are under review, emphasizing, “Our nation requires that our partners be willing to help our warfighters win in any fight.”

The dispute centers on Anthropic’s refusal to permit the Pentagon to use its Claude AI model for all lawful purposes — specifically limiting its application in mass domestic surveillance and fully autonomous weapon systems.

Anthropic maintains these restrictions protect American privacy and prevent uncontrolled AI from targeting civilians. However, the Pentagon argues such limitations are too restrictive and could impair battlefield effectiveness.

The conflict followed months of discussions with Anthropic and other major AI laboratories including OpenAI, Google, and xAI. Reports indicate that Anthropic’s Claude is currently the only AI model cleared for classified military systems — and was reportedly assisting in the January operation to capture Venezuela’s Nicolas Maduro.

Despite recent agreements from competing AI companies to remove safety restrictions for unclassified military use, Anthropic remains the most resistant to loosening its policies. Senior administration officials believe that other firms are more likely to comply with the “all lawful use” standard.

Anthropic officials counter that current U.S. law already prohibits domestic mass surveillance and that AI’s rapid capabilities outpace outdated legislation. They maintain ongoing talks with the War Department are conducted in good faith.

A contract worth up to $200 million — a small fraction of Anthropic’s annual revenue of $14 billion — could be at risk if the Pentagon proceeds with the supply chain risk designation.

By Charlie McCarthy