Shannon Bond

Secretary of Defense Pete Hegseth made the announcement on X after the Pentagon and the company reached an impasse in a dispute over how the military could use Anthropic's AI model, Claude.

Hegseth said the designation means, quote, effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic.

Anthropic called the move, quote, legally unsound and warned it would, quote, set a dangerous precedent for any American company that negotiates with the government.

Shannon Bond, NPR News.

Anthropic says the U.S.

military cannot use its AI model for domestic surveillance or to power autonomous weapons.

The Pentagon says companies must allow all lawful uses of their technology.

If Anthropic doesn't drop its restrictions, it could lose its $200 million contract and potentially be blacklisted from other government work.

OpenAI CEO Sam Altman says his company also has, quote, red lines about how the military uses its AI.

In a note to staff, Altman said OpenAI is trying to negotiate the same guardrails Anthropic is fighting with the Pentagon over, according to a person not authorized to speak publicly.

The Pentagon didn't return a request for comment.

Shannon Bond, NPR News.

Anthropic's contract allows the U.S.

military to use its AI model, CLAWD, on classified systems.

But Anthropic says the military cannot use its tools for domestic mass surveillance or to power entirely autonomous weapons.

The Pentagon says the company doesn't get to decide that.

It says Anthropic must let the military use its AI for, quote, all lawful purposes.

If it doesn't, the Trump administration will name Anthropic a supply chain risk, effectively blacklisting it from working with the U.S.

military and contractors.

The Pentagon says Anthropic has until 5.01 p.m.