Trump order cutting ties with Anthropic likely coming later this week - CBS News

President Trump has directed all federal agencies to cease using Anthropic's artificial intelligence technology, citing national security concerns. The order, announced via Truth Social, grants agencies like the Department of Defense six months to phase out Anthropic's AI systems, with threats of legal and civil enforcement if compliance is not achieved. Concurrently, Defense Secretary Pete Hegseth designated Anthropic a "supply chain risk", barring military contractors from engaging with the company effective immediately.

Anthropic has responded by filing a lawsuit in federal court, arguing the designation is "unprecedented and unlawful", and challenging the government's authority to restrict its technology under the First Amendment. The company claims the Pentagon's actions jeopardize hundreds of millions in contracts and undermine its reputation, while asserting its safeguards against mass surveillance and autonomous weapons were reasonable. The Pentagon, however, maintains Anthropic's refusal to permit "all lawful use" of its AI model—specifically its Claude system— poses operational risks, particularly in classified military applications.

The dispute follows a failed negotiation over guardrails for Claude's deployment, with Anthropic seeking limits on surveillance and lethal autonomous systems, while the Pentagon insists on unrestricted access. Legal experts note the case could set a precedent for government control over AI development, with broader implications for tech firms balancing innovation and regulatory demands. Financial markets remain cautious, as Anthropic's $200 million Pentagon contract and partnerships face disruption, though the company has pledged to facilitate a transition to alternative providers if required.

Senator Mark Warner and others have criticized the move as politically motivated, raising concerns about due process and the potential chilling effect on AI innovation. The outcome of Anthropic's litigation and the Pentagon's ongoing reliance on Claude during military operations will likely shape the financial and legal landscape for AI contractors in the coming months.