Artificial intelligence firm Anthropic has pushed back against the Pentagon after being asked to allow unrestricted military use of its AI systems, including its chatbot Claude. CEO Dario Amodei said the company “cannot in good conscience accede” to the Defence Department’s latest contract terms, escalating a public standoff that could see Anthropic lose its government contract.
The Pentagon has reportedly given the company until Friday to comply or face possible termination of its agreement. Officials have also warned of further steps, including designating Anthropic as a supply chain risk or invoking the Defence Production Act to expand military authority over its products.
Contract dispute over AI safeguards
Anthropic clarified that it is not walking away from negotiations. However, Amodei said new contract language “made virtually no progress on preventing Claude's use for mass surveillance of Americans or in fully autonomous weapons.”
The company’s internal policies prohibit such uses. It is currently the only major AI firm among peers like Google, OpenAI and Elon Musk’s xAI that has not agreed to supply its models to a new internal US military AI network.
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In response, Pentagon spokesperson Sean Parnell said the military “has no interest in using AI to conduct mass surveillance of Americans (which is illegal) nor do we want to use AI to develop autonomous weapons that operate without human involvement.”
Amodei argued that some of the Pentagon’s threats appear contradictory, noting that labelling the company a security risk while also calling its technology essential to national security sends mixed signals. “But given the substantial value that Anthropic's technology provides to our armed forces, we hope they reconsider.”
“It is the Department's prerogative to select contractors most aligned with their vision”, Amodei said in a statement.
Defense Department raises stakes in AI standoff
Defence Secretary Pete Hegseth issued a clear ultimatum to Anthropic following his meeting with CEO Dario Amodei on Tuesday. The company must permit unrestricted military use of its artificial intelligence systems by Friday or risk losing its federal contract. Officials also indicated that the Pentagon could escalate the matter by labelling Anthropic a supply chain risk or invoking the Defence Production Act, a Cold War-era law that allows the government broader authority over critical technologies.
Responding on Thursday, Amodei said, “those latter two threats are inherently contradictory: one labels us a security risk; the other labels Claude as essential to national security.”
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Pentagon spokesperson Sean Parnell maintained that the department intends to “use Anthropic's model for all lawful purposes,” though he did not elaborate on what that would specifically involve. He added that broader access to the technology would help avoid “jeopardising critical military operations.”
“We will not let ANY company dictate the terms regarding how we make operational decisions,” Parnell said.
The discussions that reached a breaking point this week have been underway for months. Amodei reiterated that given “the substantial value that Anthropic's technology provides to our armed forces, we hope they reconsider.” If an agreement cannot be reached, he said the company “will work to enable a smooth transition to another provider.”
Political reactions and governance concerns
The dispute has drawn attention on Capitol Hill. Republican Senator Thom Tillis questioned why the matter is unfolding publicly, saying strategic vendor disagreements should be handled behind closed doors. Democratic Senator Mark Warner said he was “deeply disturbed” by reports that the Pentagon may be pressuring a leading US company, and renewed calls for stronger AI governance in national security contexts.
Defence Secretary Pete Hegseth told Fox News that “ultimately, we want lawyers who give sound constitutional advice and don't exist to attempt to be roadblocks to anything.”
Anthropic has said that if negotiations fail, it will work to ensure a smooth transition to another provider.
