Defense Secretary Pete Hegseth is reportedly very angry with Anthropic; Pentagon says: We are going to make sure they ...

Defense Secretary Pete Hegseth is reportedly very angry with Anthropic. According to a report in Axios, Pentagon is "close" to cutting business ties with Anthropic and designating the AI company a "supply chain risk". The designation of "supply chain risk" will mean that any company who wants to do business with the U.S. military has to cut ties with Anthropic, said the report quoting a senior Pentagon official. What makes this critical is that this kind of penalty in America is reportedly usually reserved for foreign adversaries. It further means that post the "supply chain risk" designation, any company doing business with the Pentagon would have to certify that they don't use Claude in their own workflows. And this may mean quite a few companies, given the wide reach of Anthropic, which recently claimed that eight of the 10 biggest US companies use Claude.

The breakdown of talks between Anthropic and Pentagon follow months of contentious negotiations over the terms under which the military can use Claude. CEO Dario Amodei's long post on concerns about AI-gone-wrong reportedly has not been liked well inside the Pentagon. A source familiar with the dynamics reportedly said that senior defense officials have been frustrated with Anthropic for some time now, and just picked this opportunity to pick a public fight.


Incidentally, Anthropic's Claude is the only AI model currently available in the US military's classified systems, and is the world leader for many business applications. Pentagon officials have openly praised the capabilities of Claude, Anthropic's AI model. Claude was also reportedly the first model that the Pentagon brought into its classified networks.

What angry Pentagon told Anthropic

“The Department of War’s relationship with Anthropic is being reviewed,” Pentagon spokesman Sean Parnell said in an emailed statement to Axios. “Our nation requires that our partners be willing to help our warfighters win in any fight. Ultimately, this is about our troops and the safety of the American people,” it added. A senior official said, "It will be an enormous pain in the ass to disentangle, and we are going to make sure they pay a price for forcing our hand like this."

What Anthropic said on making Pentagon angry

As per the report, Anthropic spokesperson claimed that the company is in talks with the Pentagon. "We are having productive conversations, in good faith, with DoW on how to continue that work and get these new and complex issues right," said Anthropic spokesperson, as per the report.

The spokesperson reiterated the company's commitment to using frontier AI for national security, noting Claude was the first to be used on classified networks. Another Anthropic official told Axios, "There are laws against domestic mass surveillance, but they have not in any way caught up to what AI can do."

For instance, the official said, "AI can be used to analyze any and all publicly available information at scale. DoW is legally permitted to collect publicly available information — so-called 'open source intelligence' — including everything posted on social media, public forums and online news. That's always been true, but the scale was limited by human capacity."

Anthropic won a two-year agreement with the Pentagon last year that involved a prototype of AI’s Claude Gov models and Claude for Enterprise. Analysts also say that Anthropic negotiations may set the tone for Pentagon talks with OpenAI, Google and xAI, which aren’t yet used for classified work. The Pentagon is said to be negotiating with these companies about moving into the classified space, and is insisting on the "all lawful purposes" standard for both classified and unclassified uses.