President Donald Trump said on Friday that he had instructed all US government departments to stop using technology supplied by the artificial intelligence firm Anthropic with immediate effect.
Writing on Truth Social, Trump added that US agencies, including the Defense Department, would be given up to six months to fully wind down their use of the company's products.
“THE UNITED STATES OF AMERICA WILL NEVER ALLOW A RADICAL LEFT, WOKE COMPANY TO DICTATE HOW OUR GREAT MILITARY FIGHTS AND WINS WARS! That decision belongs to YOUR COMMANDER-IN-CHIEF, and the tremendous leaders I appoint to run our Military,” Trump posted on Truth Social.
Also Read: US Bars Anthropic Products From Agencies, Contractors
The Pentagon has classified Anthropic as a supply-chain risk, following Trump's order.
What Does The Move Mean?
The move by the Trump administration is expected to reverberate across the artificial intelligence sector, where companies have poured hundreds of billions of dollars into development and are now vying for lucrative government contracts, reported Bloomberg.
The move effectively erases up to $200 million worth of work that Anthropic had lined up with the US military, while also jeopardising smaller yet strategically significant contracts with civilian bodies such as the State Department.
The company had also reached a sweeping agreement last year with the General Services Administration, allowing federal departments to access its Claude system for a token fee of $1.
The designation of a supply-chain risk may have broader ramifications, as a number of companies integrate Anthropic's technology into their own offerings.
The firm is stepping up efforts to convert more corporate users into paying customers as it seeks to cover the soaring costs of AI development and support a valuation of about $380 billion. Market watchers also believe the company is laying the groundwork for a stock market listing, potentially as early as this year, reported Bloomberg.
US Defence Secretary Pete Hegseth has directed the Pentagon to prohibit its contractors and their affiliates from engaging in any commercial dealings with Anthropic. The order is set to have knock-on effects for the Maven Smart System, an AI-driven battlefield management platform developed by Palantir Technologies Inc., which had struck an agreement in the latter half of 2024 to incorporate Anthropic's tools.
According to Reuters, Anthropic said on Friday that it plans to take legal action against the Pentagon over its decision to classify the firm as a supply-chain risk.
The blacklisting of Anthropic has also turned into an opportunity for OpenAI.
Late on Friday, Sam Altman said OpenAI had reached an agreement with the Department of Defense on the deployment of its artificial intelligence models. This came soon after President Trump signalled that the government would no longer work with rival Anthropic, reported CNBC.
Anthropic has been supplying its technology to US government bodies and the armed forces since 2024, becoming the first developer of advanced artificial intelligence systems to see its tools adopted for classified government operations, reported BBC.
Also Read: Pentagon Taps OpenAI After Kicking Off Anthropic From US Defence Systems
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