News: Trump Bans Anthropic From Government Use and Pentagon Labels It a National Security Risk — OpenAI Swoops In With Classified Network Deal
President Trump ordered all federal agencies to immediately cease using Anthropic's artificial intelligence technology on Friday, capping an increasingly bitter dispute between the AI company and the Pentagon over whether military contractors can set limits on how their technology is deployed in warfare. Defense Secretary Pete Hegseth followed through on his threat to designate Anthropic a supply chain risk to national security — a classification traditionally reserved for foreign adversaries like China's Huawei — effectively blacklisting the $380 billion AI company from military work. Within hours of Trump's announcement, rival OpenAI struck a deal with the Defense Department to deploy its own AI models on classified networks, positioning itself as the Pentagon's preferred AI partner. The rapid sequence of events marks the most dramatic confrontation between a U.S. technology company and the federal government since the battles over encryption in the 1990s, with profound implications for the AI industry's relationship with government, the trajectory of military AI adoption, and the valuations of companies preparing for public offerings. At the center of the dispute are two questions that will define AI's role in national defense for decades: whether AI companies can prevent their tools from being used for mass surveillance of American citizens, and whether today's AI models are reliable enough to make lethal targeting decisions without human oversight.