Chapter 1: What is the conflict between Anthropic and the Pentagon about?
Top names in the U.S. defense industry got together last week for a meeting in West Palm Beach. Here's our colleague Amrit Ramkumar.
The Defense Technology Summit in Florida on Tuesday was really a gathering of some top Pentagon officials and people in the tech world. And the motivation is to embed the most advanced technology throughout the U.S. military.
These days, talking about tech means talking about AI. But there was one thing they were really buzzing about.
And that was the AI company Anthropic and the use of its tools in the military. And it's the latest sort of development in this saga that's consumed a lot of Washington.
This saga goes back years and has to do with the way Anthropic's AI is being used.
They are clashing with the Pentagon over how the military uses quad, Anthropic's AI models.
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Chapter 2: How did Anthropic's partnership with Palantir influence military operations?
And Anthropic is trying to put up some guardrails and prevent some uses. And they've been fighting over that for many months now.
One of the loudest voices in the disagreement is Secretary of Defense Pete Hegseth.
Department of War AI will not be woke. It will work for us. We're building war-ready weapons and systems, not chatbots for an Ivy League faculty lounge.
What is at stake here? Why does it matter if Anthropic and the government are on the outs?
This fight is really about AI's use in the military and the government broadly. It's about whether the technology can be used for, in the future, autonomous weapons potentially, or for surveillance and law enforcement. And that has far-reaching consequences that will probably not be clear for a while. But this is the first salvo in what is going to be a very long, complicated battle.
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Monday, February 23rd. Coming up on the show, Anthropic vs. the Pentagon. Anthropic was founded in 2021, after a group of former OpenAI employees decided to start an alternative.
They are a bunch of people who got uncomfortable with the idea that OpenAI was favoring technology advancement over responsible use of the technology.
OpenAI has said it prioritizes AI safety. Still, Anthropic's reputation grew.
This is just like a quirky bunch of San Francisco characters. The CEO, Dario, is known as Professor Panda. He has a chicken coop in his backyard and he has a camera on them at all times. So really, yeah, they're sort of this ragtag bunch in some ways that came out of OpenAI and they've now suddenly become maybe one of the most important AI developers.
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Chapter 3: What limitations is Anthropic placing on the use of its AI models?
So when the Trump administration came in and on day one basically said, we're getting rid of all of that, Anthropic fought back. And they've basically spoken publicly about the need for guardrails.
Here's Dario Amadei again.
I think we do need to be raising the alarm. I think we do need to be concerned about it. I think policymakers do need to worry about it.
If
They're the one big AI model developer that has been fighting the Trump administration on this issue and doesn't like the Trump administration's laissez-faire approach to AI regulation. They don't like exporting advanced AI chips to China. And they speak their mind. The CEO, Dario Amadei, is one of the only notable CEOs who has spoken out consistently against Trump in this second term.
At the same time, Anthropic was looking to grow its business and find new customers. And one of the most high-value customers for any AI company is the U.S. military. Anthropic had already formed a partnership with Palantir, a data analytics company that has long worked with the Department of Defense and federal law enforcement.
That partnership allowed Palantir to offer Claude to Palantir customers, which laid the groundwork for Anthropic's technology to be used in defense work. And in the summer of 2025, Anthropic landed a major $200 million contract with the U.S. military. The idea was that defense operations could start using Anthropic's chatbot Claude to help with their work.
The government is trying to embed AI everywhere it can, and Anthropic's Claude models are simply too good. They're often better at things like coding or other sorts of applications.
The government had also granted a special level of access to Anthropic through the company's partnership with Palantir, meaning Clawd could be used in classified settings.
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Chapter 4: Why is the Pentagon threatening to label Anthropic a supply chain risk?
It's the only AI model that currently has that level of clearance, and getting it takes a long time. So if Anthropic says it's really concerned with safety, it's really socially conscious, that sort of doesn't strike me as the type of place that would go for a military contract. Why did the company go down that route?
Military contracts are an enormous deal for AI companies trying to get their foot in the door with the US government. AI is seen as the future technology across the board, but it has so many military applications. People talk about autonomous drones, using it to crunch numbers more efficiently. I mean, you can really embed it throughout your operations. It could be used down the road in battle.
And more importantly for these companies, it's seen as just very lucrative because the military is seen as a huge, huge customer. And if they say, we like your AI better than someone else's AI, that has immense value to shareholders. So for all of those reasons, it's important.
At the time, Anthropic noted in a press release that the partnership would, quote, "...dramatically improve intelligence analysis and enable officials in their decision-making processes." How quickly does the culture clash between Anthropic and the Trump administration start to bubble up after this contract is signed?
Almost immediately, the tension started running hot. Around the same time, it's important to note that the Trump administration signed an executive order about woke AI that essentially implicitly was calling out Anthropic and others that they felt their models were too woke.
And if you asked certain questions about how many genders there were or other things like that, you would get a woke response. And Anthropic was widely seen as a main target.
Dario Amadei has said that the company isn't woke and that Anthropic doesn't have political motivations.
And then right away, Anthropic and the military, there were discussions about what Claude could and couldn't be used for. And in Anthropic's terms of service, it states very clearly it cannot be used for anything related to domestic surveillance. And autonomous weapons is another red line that the company has drawn.
Anthropic's usage guidelines prohibit Claude from being used to facilitate violence, develop weapons, or conduct surveillance. An Anthropic spokesman said the company can't comment on, quote, whether Claude or any other AI model was used for any specific operation, classified or otherwise.
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Chapter 5: What are the implications of AI use in military contexts?
He added that any use of Claude is, quote, required to comply with our usage policies, which govern how Claude can be deployed. We work closely with our partners to ensure compliance. But Anthropic's stance was about to be tested.
The United States just attacked Venezuela's capital, hitting military facilities in the country. President Trump ordered this operation.
And tensions between Anthropic and the Defense Department would spiral into a full-blown standoff. That's next. In January, the U.S. military ordered a strike on Venezuela and captured its president, Nicolas Maduro. The Wall Street Journal has since reported that Claude was used in that operation.
It's been very hard, as you can imagine, to unearth too many details about how these models get used, but we are told they offer some benefits, especially in the planning stages of these different missions. So yes, this is one of the first times we know that a specific model was used in an operation like this where people died, and that was on a pretty large scale.
Afterward, people at Anthropic started asking some questions about how and why and things of that nature. And then someone at Anthropic asked someone at Palantir how COD was used in Venezuela. And sort of the tone of the question and the substance set off alarm bells and the Department of Defense found out
And the Pentagon was quick to respond.
Pete Hegseth, in a speech last month, he said essentially that we need AI tools that let us fight wars.
Effective, immediately responsible AI at the War Department means objectively truthful AI capabilities employed securely and within the laws governing the activities of the department. We will not employ AI models that won't allow you to fight wars.
And he was referring to Anthropic when he said that, we're told. So the Pentagon has sort of stayed at that spot. And they're continuing to say, like, we need every AI model that we work with to agree to be used in all waffle use cases.
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Chapter 6: How did the Trump administration's policies affect Anthropic?
And that has to apply across the board.
The administration started considering if it would cancel its $200 million contract with Anthropic, according to Wall Street Journal reporting. A spokesman for the Pentagon said that the Defense Department's relationship with Anthropic is under review. He said, quote, Our nation requires that our partners be willing to help our warfighters win in any fight.
A spokesperson for Anthropic said the company is, quote, committed to using frontier AI in support of U.S. national security. Tomorrow, Hegseth and Amadei are meeting in what's expected to be a tense discussion of how to move forward. And so where are we at in this feud as the tension mounts? How bad has it gotten?
It's gotten pretty bad in the sense that the Pentagon has now threatened to label Anthropic a supply chain risk, which sounds pretty vague, but is actually a pretty big deal because that's something that's usually only used for companies associated with foreign adversaries.
The government typically labels a company as supply chain risk when it sees it as a potential threat to the economy or national security. The label means the company's products cannot be used for any government-related work. And naming an American company a supply chain risk is extremely unusual.
And if they'd go through with that, that would mean all Pentagon vendors and contractors would have to certify that they don't use Anthropix models in their government work. So if you think about that, that means Anthropix's biggest investors and customers, they would all have to say, in the context of their government work with the Pentagon, Anthropix and Quad had nothing to do with this.
It's important to note, too, that Pete Hegseth, the defense secretary, combating wokeism and woke companies has been at the core of what he's tried to do in the military. And a lot of people just keep coming back to that idea that the administration feels anthropic is too woke in different settings or too liberal. They can't quite shake that feeling.
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Chapter 7: What are the potential consequences for Anthropic if labeled a supply chain risk?
Well, let's say the government does do that if it follows through on this idea of labeling anthropic supply chain risk. What would anthropic's options be in that scenario?
That's a really good question. It's safe to say Anthropic is in damage control mode. And if they do get designated a supply chain risk, extreme damage control mode to try to salvage something. Because again, getting cut off from the military would be a huge deal for them. They've invested a lot in trying to become the AI company or one of the few focused on national security.
And it would be a big blow because then you're potentially cut off from a huge customer market. So, I mean, they would be in a real bind. They would have to maybe take other steps like bending a knee a little bit in a way they haven't before. So that could put them in a very tough spot for sure.
What about the Pentagon? Are there any risks for the military if they stop working with Anthropic?
A lot of very smart people say that would be counterproductive for U.S. national security, for the goals of the administration, etc., etc. So they've made these threats, but a lot of people are looking at it and saying this would be sort of an own goal and wouldn't really benefit anyone.
A lot of people look at this story and they think the Trump administration has Anthropic in a tough spot and is targeting them and they have a lot of leverage.
But we're told if the Trump administration decided to cut Anthropic off tomorrow and the military decided to stop using Claude altogether, there would be some real problems because Claude, again, is the only one that's been approved to be used in classified scenarios. None of the other models have that approval yet. And it has already been embedded.
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Chapter 8: What does the future hold for AI in military applications?
So you can't really strip that out. Cutting yourself off from some of the most advanced models would not be a great strategic choice.
And what does this say about the moment that we're in when it comes to AI adoption, particularly in the military, but in the government more generally?
It shows that AI adoption at the highest levels of government and at the highest levels of companies is happening very quickly. And the government's going to be using it more and more. So it sort of supports that case that the sort of AI arms race and the geopolitical implications of all of that are only accelerating.
That's all for today, Monday, February 23rd. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Deborah Acosta, Vera Bergen-Gruen, Keech Hagee, Berber Jin, and Shalini Ramachandran. Thanks for listening. See you tomorrow.