Trump: I am directing every federal agency in United States government to immediately cease all use of Anthropic's technology
TL;DR
The Trump administration has ordered all federal agencies to stop using Anthropic's AI technology due to a dispute over safety restrictions, threatening to designate the company as a supply chain risk and potentially invoking the Defense Production Act. This conflict centers on Anthropic's refusal to remove ethical guardrails, such as bans on mass surveillance and autonomous weapons, which the Department of Defense demands for national security. The standoff could impact Anthropic's contracts, IPO plans, and set precedents for AI governance and corporate autonomy.
Trump: I am directing every federal agency in United States government to immediately cease all use of Anthropic's technology
Trump Administration Threatens to Ban Anthropic’s AI Across Federal Agencies Amid Regulatory Dispute
The Trump administration has directed all federal agencies to immediately cease using Anthropic’s AI technology, escalating a high-stakes conflict between the Department of Defense (DOD) and the AI developer. The move follows months of contentious negotiations over terms of service for Anthropic’s Claude AI models, which the DOD has integrated into classified military operations.
At the core of the dispute is Anthropic’s refusal to remove restrictions on how its AI tools can be used. The company has maintained safeguards against applications such as mass domestic surveillance and fully autonomous weapons systems without human oversight according to CNBC reports. The DOD, however, insists on “unrestricted access for all lawful uses,” framing the demand as critical for national security and operational flexibility.
Secretary of Defense Pete Hegseth has threatened to label Anthropic a “supply chain risk,” a designation typically reserved for foreign adversaries, which would effectively bar the company from government contracts and force contractors to discontinue use of its tools.
Anthropic, valued at $380 billion and preparing for a potential IPO, faces existential risks if the administration follows through. The company's $200 million DOD contract and its status as the sole provider of AI tools for classified U.S. government networks make it a pivotal player in the federal AI landscape.
A “supply chain risk” designation could disrupt partnerships with major corporations, many of which rely on Anthropic's Claude Code product for software development and also serve as DOD contractors.
The administration has also hinted at invoking the Defense Production Act (DPA) to compel Anthropic to comply, a move that could force the company to retrain its AI models without safety guardrails. Legal experts note that such actions would represent an unprecedented assertion of government authority over private AI development, potentially setting a precedent for future conflicts with tech firms.
Anthropic CEO Dario Amodei has rejected the demands, stating the company cannot "in good conscience" remove its ethical restrictions. The standoff highlights broader tensions between AI safety advocates and government agencies seeking unfettered access to cutting-edge technology. With Anthropic’s $14 billion annual revenue run rate and IPO plans now in jeopardy, the dispute underscores the financial and regulatory risks facing AI companies in an era of rapid technological advancement.
Congressional oversight hearings are anticipated, as lawmakers weigh the implications for national security, corporate autonomy, and the future of AI governance. The outcome could reshape the balance of power between federal agencies and private-sector innovators.
