White House Pulls the Plug: How Anthropic's AI Safety Stand Triggered a Government-Wide Ban
Background: A Week of Escalating Tensions
The confrontation between the Trump administration and AI startup Anthropic had been building for weeks. At the center of the dispute was a $200 million Pentagon contract awarded to Anthropic in July 2025, under which the company's AI model, Claude, became the first frontier AI system deployed on the U.S. military's classified networks — through a partnership with data analytics firm Palantir.
The Pentagon demanded that Anthropic agree to allow the military to use Claude for "all lawful purposes" — language that Anthropic interpreted as potential authorization for domestic mass surveillance and fully autonomous weapons systems. Anthropic drew two firm red lines: Claude would not be used in autonomous lethal weapons and would not be used for mass surveillance of American citizens.
The Breaking Point: Thursday's Ultimatum
On Thursday, February 26, Defense Secretary Pete Hegseth set a 5:00 PM EST Friday deadline for Anthropic to drop its guardrails or face consequences. Pentagon officials raised the possibility of invoking the Defense Production Act to compel compliance. Pentagon Undersecretary for Research and Engineering Emil Michael escalated rhetoric by calling Anthropic CEO Dario Amodei a "liar" with a "God complex."
Amodei responded with a public statement late Thursday: "We cannot in good conscience accede to their request." He argued that "using these systems for mass domestic surveillance is incompatible with democratic values" and that frontier AI systems are "simply not reliable enough to power fully autonomous weapons."
Friday's Presidential Order
At approximately 3:03 PM EST on Friday, February 27, President Trump posted on Truth Social, delivering a sweeping government-wide ban on Anthropic's technology.
Trump wrote: "The Leftwing nut jobs at Anthropic have made a DISASTROUS MISTAKE trying to STRONG-ARM the Department of War, and force them to obey their Terms of Service instead of our Constitution. Their selfishness is putting AMERICAN LIVES at risk, our Troops in danger, and our National Security in JEOPARDY."
Trump directed every federal agency to "IMMEDIATELY CEASE all use of Anthropic's technology," while granting agencies like the Department of Defense a six-month phase-out period due to their deep integration of Anthropic's products. He also threatened Anthropic with "major civil and criminal consequences" if the company did not cooperate during the transition.
Pentagon Designates Anthropic a National Security Supply-Chain Risk
Shortly after the presidential deadline at 5:00 PM EST, Defense Secretary Hegseth announced on X (formerly Twitter) that the Pentagon was designating Anthropic a "Supply-Chain Risk to National Security" — a classification typically reserved for companies tied to foreign adversaries such as China and Russia.
Hegseth declared: "No contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic." He stated the six-month period would allow for "a seamless transition to a better and more patriotic service."
The General Services Administration also announced it would remove Anthropic from USAi.gov, the federal government's centralized AI testing platform.
Industry Reaction: Silicon Valley Rallies Behind Anthropic
The dispute reverberated across the AI industry. OpenAI CEO Sam Altman publicly sided with Anthropic, stating in both an employee memo and a CNBC interview that his company shares the same "red lines" — opposing AI use in autonomous lethal weapons and mass surveillance. OpenAI itself holds a separate $200 million Pentagon contract, though only for unclassified use cases.
More than 100 employees at Google signed an open letter to the company's chief scientist Jeff Dean, demanding similar safeguards on the Gemini AI models. Employees at Microsoft and Amazon also called on management to resist unrestricted military use of their AI products.
Elon Musk, however, sided with the Trump administration, posting on X that "Anthropic hates Western civilization." Notably, Musk's AI company xAI — a direct competitor to Anthropic — had just become the second AI company cleared for use on classified military networks, positioning it as a likely beneficiary of Anthropic's ouster.
Political Fallout
Senator Mark Warner (D-VA), Vice Chair of the Senate Select Committee on Intelligence, condemned the president's action, warning it "raises serious concerns about whether national security decisions are being driven by careful analysis or political considerations."
Senators Ed Markey (D-MA) and Chris Van Hollen (D-MD) sent a letter to Hegseth, calling the Pentagon's threats "a chilling message to American companies."
What Comes Next
The ban places Anthropic — currently valued among the world's most valuable AI startups with approximately $14 billion in annual revenue — in an unprecedented position. While the $200 million Pentagon contract is a relatively small portion of its revenue, the supply-chain risk designation could disrupt broader commercial partnerships and complicate a widely anticipated IPO (though Anthropic has said no final IPO decision has been made).
The episode is widely seen as a warning shot to other AI firms — including Google and OpenAI — about the administration's expectations for unrestricted government access to AI systems. Whether Anthropic's stand will ultimately strengthen or weaken its position in the marketplace remains to be seen.