Following a White House directive, the U.S. Departments of State, Treasury, and Health and Human Services have moved to cease using Anthropic’s AI products, including its Claude chatbot platform. The Pentagon had already begun transitioning to alternative providers such as OpenAI.

Treasury Secretary Scott Bessent confirmed on X that the department was terminating all use of Anthropic technology, while HHS notified employees to adopt platforms such as OpenAI’s ChatGPT and Google-backed Gemini. The State Department similarly announced it would switch its in-house chatbot, StateChat, to OpenAI’s GPT-4.1. A State Department spokesperson emphasized that these steps align with President Donald Trump’s directive to cancel Anthropic contracts and bring programs into full compliance.

William Pulte, director of the Federal Housing Finance Agency, said his bureau and affiliated agencies, including Fannie Mae and Freddie Mac, were also ending all use of Anthropic products.

National Security and Industry Implications

President Trump labeled Anthropic a supply-chain risk, a designation typically reserved for foreign suppliers deemed a potential threat. The move follows a standoff between Anthropic and the Pentagon over AI deployment safeguards. Sources indicate the dispute centered on preventing the U.S. military and intelligence agencies from using Anthropic’s AI for autonomous weapons targeting or domestic surveillance.

OpenAI, backed by Microsoft and Amazon, quickly moved to fill the gap. The company announced a deal to deploy AI models in the Defense Department’s classified networks. CEO Sam Altman later posted on X that OpenAI would amend the agreement to clarify that its technology would not be used to deliberately track or surveil U.S. persons or nationals, including through the acquisition of commercial data.

Transition Challenges and Broader Impact

The rapid agency transitions underscore the operational complexity of replacing AI tools deeply integrated into federal workflows. Claude’s prior use in sensitive military and intelligence tasks highlights the difficulty of enforcing swift cutoffs. Analysts note that the shifts also reflect broader tensions over how AI safety, ethics, and governance intersect with national security priorities.

Meanwhile, Anthropic’s Claude has seen a surge in consumer adoption, rising to No. 1 on the U.S. App Store as public backlash grew against OpenAI’s Pentagon deal, highlighting a growing divergence between federal and retail users.

AI & Machine Learning, News, Regulation & Policy

OpenAI has finalized a deal with the Department of Defense to deploy its AI models, including those powering ChatGPT, in classified U.S. military environments. The announcement followed the collapse of negotiations between Anthropic and the Pentagon, after which President Donald Trump directed federal agencies to cease using Anthropic technology following a six-month transition period. Secretary of Defense Pete Hegseth also designated Anthropic as a supply-chain risk, citing limitations on unrestricted military use.

Chief Executive Sam Altman acknowledged the speed of the negotiations, describing the agreement as “definitely rushed” and admitting that “the optics don’t look good.” The move quickly drew scrutiny from media and industry observers, with some questioning how OpenAI could secure a deal while Anthropic did not.

Safety and Deployment Measures

In response, OpenAI outlined its safeguards through a blog post and executive commentary. The company emphasized three areas where its models will not be used: mass domestic surveillance, autonomous weapons, and high-stakes automated decisions, such as social credit systems. OpenAI framed its approach as multi-layered, contrasting it with other AI companies that rely primarily on usage policies.

The deployment will occur via cloud infrastructure, with cleared OpenAI personnel overseeing operations. Contractual protections further enforce the safety red lines, the company said. Katrina Mulligan, OpenAI’s head of national security partnerships, highlighted that deployment architecture, rather than contract language alone, prevents models from being integrated directly into weapons systems or operational sensors.

Despite these assurances, analysts have questioned whether compliance with U.S. Executive Order 12333 could allow some domestic surveillance indirectly, as the order governs the collection of communications outside the U.S. that may include information about U.S. persons. OpenAI has stated it does not fully understand why Anthropic could not reach a similar agreement, expressing hope that other labs will consider comparable arrangements in the future.

Industry and Operational Implications

Altman acknowledged backlash over the deal, noting that Anthropic’s Claude briefly surpassed ChatGPT in the Apple App Store rankings following the announcement. He described the agreement as an attempt to de-escalate tensions between the Defense Department and AI companies, while protecting safety and ethical boundaries.

The development highlights the operational and political challenges of integrating advanced AI into military workflows. As U.S. defense agencies increasingly rely on AI for intelligence analysis, operational planning, and simulation, companies face scrutiny over ethical use, contractual safeguards, and alignment with government standards.

AI & Machine Learning, News

U.S. military forces reportedly employed Anthropic’s Claude AI language model during a major joint operation against Iran, just hours after President Donald Trump’s administration ordered all federal agencies to immediately cease use of Anthropic’s technology. Sources familiar with the matter told media outlets that Claude was used by U.S. Central Command for intelligence analysis, target identification, and battlefield scenario simulations tied to the March 1 strikes. 

The air operation, conducted in coordination with Israeli forces, marked one of the most significant U.S. military actions in the Middle East in years. Claude’s involvement in the mission highlights its integration into military planning processes and classified defence systems, making a rapid removal difficult. 

Political and Tech Sector Fallout

On February 27, the Trump administration directed all federal agencies to discontinue using AI tools developed by Anthropic, including its Claude models, citing national security concerns. President Trump described Anthropic’s leadership in sharply critical terms in a social media post, framing the move as necessary to prevent what he called undue influence over military operations. The directive stipulated a six-month phase-out period for agencies, including the Department of Defense, to transition away from the technology. 

Defense Secretary Pete Hegseth also designated Anthropic a “supply chain risk,” a label typically applied to firms considered threats to national security, and warned that any continued use could jeopardize future government contracts. Anthropic’s refusal to grant the Pentagon unrestricted access to its models, particularly for tasks without stringent safeguards, underpinned the dispute. 

Industry analysts note that the military’s continued reliance on Claude, even amid a government ban, reflects how advanced AI tools can become deeply embedded in mission-critical workflows. Claude had been integrated into classified networks and defence analytics through partnerships with third-party platforms, making an abrupt disconnect operationally challenging. 

Shift to Alternative AI Providers

As the standoff with Anthropic has escalated, other AI firms have moved to fill the anticipated gap. In the wake of the breakdown in relations, OpenAI announced an agreement with the Pentagon to deploy its AI models, including those underpinning ChatGPT, across classified defence infrastructure. Elon Musk’s xAI has also secured terms to make its Grok model available for secure military environments, offering additional alternatives for defence AI workloads. 

The clashes between the U.S. government and Anthropic highlight broader tensions at the intersection of AI ethics, national security, and the pace at which advanced technologies are adopted in defense contexts.

AI & Machine Learning, News