Trump blacklists Anthropic after AI firm refuses controversial military demands

On Friday last week, on the same day he commissioned a massive joint U.S.-Israeli military operation against Iran, President Donald Trump signed an executive order directing all federal agencies to immediately cease using technology from Anthropic. The decision follows a high-stakes standoff in which the $380 billion AI startup refused to remove ethical guardrails that prevent its "Claude" models from being used for domestic surveillance and fully autonomous weaponry.

By designating the San Francisco-based company a "supply chain risk," the administration has effectively placed Anthropic on a national security blacklist, a move traditionally reserved for foreign adversaries like Huawei or Kaspersky.

The "5:01 PM" deadline

The crisis reached a breaking point after Defense Secretary Pete Hegseth issued a final ultimatum: Anthropic had until Friday afternoon to agree to "all lawful use" of its technology by the Department of War (the administration's preferred term for the Pentagon).

Anthropic CEO Dario Amodei published a defiant statement on February 26, asserting that the company "cannot in good conscience" allow its AI to power autonomous drones or mass surveillance programs.

Exactly 13 minutes after the deadline passed, Hegseth declared Anthropic a supply chain threat. President Trump followed with a Truth Social post, labeling the company's leadership "left-wing nut jobs" who were trying to "strong-arm" the military.

Economic and legal fallout

The blacklist is more than a loss of government revenue; it is a potential existential threat to Anthropic's enterprise business.

Under the "supply chain risk" designation, any company that does business with the U.S. military, including giants like Boeing, Lockheed Martin, and Palantir, is now prohibited from using Anthropic’s products in their workflows.

Anthropic announced it will challenge the designation in court, arguing that the administration lacks the legal authority to label a domestic company a security risk over a contract dispute.

Analysts warn the ban could trigger a massive "unwinding" of Claude-based integrations across the global tech sector as companies fear being caught in the crossfire of the Trump-Silicon Valley feud.

OpenAI makes new deal with Pentagon

Just hours after Anthropic was blacklisted, OpenAI announced a fresh deal with the Pentagon to fill the void. However, in a surprising twist, CEO Sam Altman stated that OpenAI’s contract does include the same safety principles regarding autonomous weapons that Anthropic died on the hill for—suggesting the Pentagon may have been willing to negotiate with some, but not all, providers.

There are also reports that Elon Musk’s xAI (Grok) is being fast-tracked for higher-level security clearances to become the primary AI provider for classified military networks, with Musk publicly supporting the administration’s "pro-constitution" stance.

"We will decide the fate of our Country — NOT some out-of-control, Radical Left AI company," Trump wrote. "Anthropic better get their act together... or I will use the Full Power of the Presidency to make them comply."