President Trump ordered all federal agencies to immediately stop using Anthropic's technology Friday evening after CEO Dario Amodei refused Defense Secretary Pete Hegseth's 5:01 PM deadline to remove safeguards preventing Claude AI from conducting mass domestic surveillance of Americans or powering fully autonomous weapons, with Hegseth subsequently designating the San Francisco AI startup a "supply chain risk"—an unprecedented classification normally reserved for Chinese and Russian companies that legally bars defense contractors from any commercial activity with Anthropic.
The dramatic escalation came hours before the US and Israeli military launched strikes against Iran, ending weeks of tense negotiations between the Pentagon and Anthropic over contract terms governing military AI use. Claude had been the only AI model deployed on the Pentagon's classified networks since the $200 million contract was signed in July 2025.
"We are still interested in working with them as long as it is in line with our red lines," Amodei told CBS News in an exclusive interview Friday night. "Our position is clear. We have these two red lines. We've had them from day one. We are still advocating for those red lines. We're not going to move on those red lines."
Pentagon's "All Lawful Purposes" Demand
The conflict centered on Anthropic's insistence on explicit contractual language prohibiting Claude's use for mass surveillance of Americans and fully autonomous lethal weapons systems. The Pentagon demanded Anthropic accept an "all lawful purposes" standard without specific written restrictions, arguing federal law already prevents mass surveillance and military policies restrict autonomous weapons.
Emil Michael, the Pentagon's chief technology officer, told CBS News Thursday that "at some level, you have to trust your military to do the right thing. But we do have to be prepared for the future. We do have to be prepared for what China is doing."
As compromise, Michael said the military offered written acknowledgements of existing federal laws and military policies restricting the contested uses. Anthropic rejected this, stating the offer was "paired with legalese that would allow those safeguards to be disregarded at will."
Defense Secretary Hegseth, Under Secretary Emil Michael, Deputy Secretary Steve Feinberg, and the Pentagon's top lawyer attended Tuesday's meeting with Amodei—a show of force signaling the importance military officials placed on the dispute. The meeting was described by one Defense official as "not warm and fuzzy at all," though another source characterized it as "cordial" with no raised voices.
"Retaliatory and Punitive" Actions
Trump's Truth Social post Friday labeled Anthropic "leftwing nut jobs" and a "radical left, woke company," stating "their selfishness is putting AMERICAN LIVES at risk, our Troops in danger, and our National Security in JEOPARDY." The president gave agencies a six-month window to phase out Anthropic products while warning the company to "better get their act together, and be helpful during this phase out period" or face "major civil and criminal consequences."
Hegseth's supply chain risk designation directs all companies conducting business with the military to cut off "any commercial activity with Anthropic"—a move that could catastrophically impact the startup given major investors Amazon and Alphabet hold extensive defense contracts.
Amodei called the designation "unprecedented" for an American firm rather than a foreign adversary and termed the government's actions "retaliatory and punitive." He argued Hegseth lacks legal authority to bar all military contractors from working with Anthropic and can only prohibit using Anthropic technology for government contracts specifically.
"When we receive some kind of formal action, we will look at it, we will understand it and we will challenge it in court," Amodei stated, noting Anthropic hadn't formally received supply chain risk designation paperwork as of Friday night.
Amodei Defends Safeguards
In his CBS News interview, Amodei defended the contested safeguards on technical and ethical grounds. On mass surveillance, he argued "things may become possible with AI that weren't possible before" and the technology's potential is "getting ahead of the law," warning government could buy data from private firms and use AI to analyze it.
Regarding autonomous weapons, Amodei said Anthropic isn't categorically opposed to such systems—especially if US adversaries develop them—but "the reliability is not there yet" and "we need to have a conversation about oversight." He expressed concern that unpredictable AI could target wrong people by mistake and highlighted unclear responsibility chains for decisions made by fully autonomous weapons.
"We don't want to sell something that we don't think is reliable, and we don't want to sell something that could get our own people killed or that could get innocent people killed," he explained.
Asked if disagreeing with government is appropriate, Amodei responded: "Disagreeing with the government is the most American thing in the world. And we are patriots. In everything we have done here, we have stood up for the values of this country."
