Pentagon Threatens to End Anthropic Work in Feud Over AI Terms

Gregory Allen, senior advisor with the Wadhwani AI Center at the Center for Strategic and International Studies and former director of strategy and policy at the Department of Defense Joint Artificial Intelligence Center, broke down the deadlock in negotiations between AI startup Anthropic and the Pentagon over terms of use for the company's AI tool. Allen warned against the all or nothing approach the administration has taken, saying 'you do not want to take one of the crown jewels of your industry and light it on fire' over the negotiations.

The Pentagon warned Anthropic PBC that it would terminate the company’s military contracts on Friday if the artificial intelligence startup failed to meet government terms for use of its technology, according to people familiar with the matter.

During a meeting Tuesday between Chief Executive Officer Dario Amodei and Defense Secretary Pete Hegseth, US officials threatened to declare Anthropic a supply-chain risk or invoke the Defense Production Act to use the AI software even if the company didn’t comply, the people said.

The ultimatum marks an escalation in a growing dispute between the Defense Department and the AI startup over the company’s insistence on guardrails for use of its Claude AI tool. If carried out, the Pentagon’s threat would put at risk up to $200 million in work that Anthropic had agreed to do for the military.

In the meeting, according to one of the people, Amodei laid out Anthropic’s conditions: that the US military refrain from using its products to autonomously target enemy combatants or conduct mass surveillance of US citizens. The person said Amodei emphasized that these scenarios have yet to arise during operations in the field.

“We continued good-faith conversations about our usage policy to ensure Anthropic can continue to support the government’s national security mission in line with what our models can reliably and responsibly do,” Anthropic said in a statement following the meeting.

The people who described the discussions did so on condition of anonymity owing to their confidential nature. Axios reported earlier on the meeting’s outcome.

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