Chapter 1: What triggered the legal battle between Anthropic and the Trump administration?
The U.S. attacks on Iran have unfolded at unprecedented speed and precision. The Department of War launched Operation Epic Fury, the most lethal, most complex, and most precise aerial operation in history. That's thanks in part to a cutting-edge weapon never before deployed on this scale, artificial intelligence.
Defense Secretary Pete Hegseth has stressed the creation of, quote, an AI-first warfighting force. And the tech the Pentagon has relied on most heavily is anthropics. But our colleague Keech Hagee says there's irony in the fact that the Pentagon has used Anthropic's clod in Iran.
So literally hours before those strikes were ordered, the president directed the federal government to stop working with Anthropic. President Trump also called Anthropic, quote, left-wing nut jobs. The Trump administration is trying to cancel its contracts with Anthropic and to designate it as a security threat that no federal agency can do business with.
Yesterday, Anthropic struck back, suing the administration. At the heart of the dispute, which has been going on for months, is a fight over values and how AI can be used in warfare. And you've been reporting on this saga, right, between the Anthropic, the Pentagon. How would you characterize the drama here? It's completely unprecedented. I've been asking people around in D.C.
over the last week, have you ever seen anything like this, where a vendor to the U.S. government became this public punching bag in this way? And no one can think of an example. I think it really shows us that AI is a different kind of technology, right?
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Chapter 2: How is AI being utilized in modern warfare by the Pentagon?
It asks new questions of our society that we just have not worked out yet. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Tuesday, March 10th. Coming up on the show, the battle over AI in warfare. Can you introduce us to the two men at the center of this fight, Secretary of Defense Pete Hegseth and Anthropic CEO Dario Amadei?
It would be hard to imagine two more different men. Pete Hegseth famously is a former Fox News host. He has sort of made his brand as being a critic of wokeness and DEI in the military. For too long, we've promoted too many uniformed leaders for the wrong reasons. based on their race, based on gender quotas, based on historic so-called firsts.
He has this very sort of brusque take-no-prisoners style. And Secretary Hegstaff has made using AI and using the sort of innovation of Silicon Valley as a sort of a key touchstone of his strategy for the department. Dario Amadei, on the other hand, is known for being more of a philosopher. He's a lifelong vegetarian who writes in-depth about AI safety. He's a scientist.
He has this curly hair that he sort of twirls when he thinks. He loves to communicate in these long, and I mean long, philosophical tracks. If you look at, you know, the situations I found myself in and the situations humanity has found themselves in, like there's so many times where it's, you know, very hard and there's this enormous suffering.
And yet there's also this incredible, you know, this incredible, this incredible inspiration that kind of, you know. He also sort of believes in hashing out these things that have been public, right? Let's have a like a public thinking through transparency. Exactly. Amadei co-founded Anthropic with the aim of prioritizing AI safety over business goals.
The company has written a moral constitution into its AI models. So Anthropic was founded by a bunch of dissidents from OpenAI that broke off to create their own company in early 2021. So there is not a lot of love lost between these folks going back a while. And that has only become more pointed as they have become real rivals in the business realm. One way to get ahead of the competition?
Scoring a contract with the government. In 2025, Anthropic's Claude became the first large language model cleared to work with classified material. But late last year, the Pentagon began discussing adding new language to its contract with Anthropic. Language that would allow the company's tech to be used for, quote, all lawful scenarios.
And this really came down to something called a usage agreement. They didn't want anything in the Pentagon's usage agreement with the tech providers that tied their hands in any way. And it was really that usage agreement that was the sticking point between Anthropic and the Pentagon. What is at the heart of that dispute, would you say?
At the very heart are two issues that Anthropic says are its red lines, that it is not willing to have its technology be used for. That is autonomous weapons and mass domestic surveillance.
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Chapter 3: Who are the main figures involved in the conflict over AI and warfare?
So it does seem like it really limited a major section of their potential customer base by alienating the government to this extent. Some companies, like Microsoft and Google, have said they'd continue working with Anthropic on commercial projects that don't involve the Pentagon. Is there any upside for Anthropic here to continue to sort of stand its ground?
Oh, I think there's been tremendous upside for Anthropic. They have kind of touched a nerve with consumers and the broader public on this idea that they're willing to stand their ground to defend civil liberties.
They have seen their app downloads shoot to number one in the App Store and really gotten applause from all kinds of different directions from folks who appreciate them standing their ground. What sort of precedent does this set when it comes to how companies work with the government and particularly, you know, the Department of Defense, the Pentagon?
I think this entire fight was about setting precedents. And we've heard that what this did is scared the living daylights out of every other potential vendor who is frightened of crossing the Pentagon. So the Pentagon just made an example of anthropic, right?
And that means that it's far less likely that others will raise their voices and try to make red lines and try to push back because the overwhelming force that came in the other direction was really something to behold. What this whole thing really shows is that we do need new laws.
We do clearly need some way of sorting out this issue of mass domestic surveillance where the law has not caught up with the technology. And this is sort of forcing this to the fore maybe faster than we would otherwise have it. It's not something that like individual companies can sort out one by one with the Pentagon or the Pentagon gets to dictate what is and isn't legal. Right.
I mean, the issue is they're like all lawful uses and anthropics basically saying, well, the law as currently written is insufficient. That's the problem. What are you keeping an eye on next? I'm very interested in this question of what's going to happen in the interim when the Pentagon has to use Claude because it's so integrated.
And yet the, you know, the political fight has pretty much already happened, right? Like the guns have gone off, the memos have been sent, the insults have been hurled. I'm not sure there's any putting the toothpaste back in the tube. I'm really curious how this interim process is going to work while they try to get replacements like OpenAI up and running.
Especially given that we're in the middle of a pretty big conflict now. It's not just hypothetical anymore. Exactly. That's all for today, Tuesday, March 10th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode from Dov Lieber, Daniel Michaels, Amrit Ramkumar, and Marcus Weisgerber. Thanks for listening. See you tomorrow.
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