Anthropic’s Pentagon Problems

0:05Amrith Ramkumar:Top names in the U.S. defense industry got together last week for a meeting in West Palm Beach. Here's our colleague Amrith Ramkumar.

0:13Jessica Mendoza:The Defense Technology Summit in Florida on Tuesday was really a gathering of some top Pentagon officials and people in the tech world. And the motivation is to embed the most advanced technology throughout the U.S. military.

0:27Amrith Ramkumar:These days, talking about tech means talking about AI. But there was one thing they were really buzzing about.

0:36Jessica Mendoza:And that was the AI company Anthropic and the use of its tools in the military. And it's the latest sort of development in this saga that's consumed a lot of Washington.

0:48Amrith Ramkumar:This saga goes back years and has to do with the way Anthropic's AI is being used.

0:55Jessica Mendoza:They are clashing with the Pentagon over how the military uses CLAWD, Anthropic's AI models. And Anthropic is trying to put up some guardrails and prevent some uses. And they've been fighting over that for many months now.

1:09Amrith Ramkumar:One of the loudest voices in the disagreement is Secretary of Defense Pete Hegseth.

1:14Jessica Mendoza:Department of War AI will not be woke. It will work for us. We're building war-ready weapons and systems, not chatbots, for an Ivy League faculty lounge.

1:32Amrith Ramkumar:What is at stake here? Why does it matter if Anthropic and the government are on the outs?

1:38Jessica Mendoza:This fight is really about AI's use in the military and the government broadly. It's about whether the technology can be used for, in the future, autonomous weapons potentially, or for surveillance and law enforcement. And that has far-reaching consequences that will probably not be clear for a while. But this is the first salvo in what is going to be a very long, complicated battle.

2:04Amrith Ramkumar:Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Monday, February 23rd.

2:17Amrith Ramkumar:Coming up on the show, Anthropic versus the Pentagon.

2:30Amrith Ramkumar:This episode of The Journal is presented by Intuit Enterprise Suite. If your finance team spends more time finding data than using it, if there's one entity here and one here and one here and one here, If scaling your business feels like starting over, you need the Intuit ERP. Intuit Enterprise Suite. The AI native ERP is here. From the makers of QuickBooks. Learn more at intuit.com slash ERP. This episode is brought to you by Claude from Anthropic. Anthropic just made a commitment. No ads in Claude. That matters because ads in AI aren't like ads elsewhere. On social media, they sit next to your content.

3:12Amrith Ramkumar:In AI, they could be woven into it. To keep you engaged rather than helping you think something through or getting the tough work done. See why the world's best problem solvers choose Claude as their thinking partner. Try it free at claude.ai slash the journal.

3:34Amrith Ramkumar:Anthropic was founded in 2021 after a group of former OpenAI employees decided to start an alternative.

3:41Jessica Mendoza:They are a bunch of people who got uncomfortable with the idea that OpenAI was favoring technology advancement over responsible use of the technology.

3:50Amrith Ramkumar:OpenAI has said it prioritizes AI safety. Still, Anthropic's reputation grew.

3:58Jessica Mendoza:This is just like a quirky bunch of San Francisco characters. The CEO, Dario, is known as Professor Panda. He has a chicken coop in his backyard and he has a camera on them at all times. So really, yeah, they're sort of this ragtag bunch in some ways that came out of open AI and they've now suddenly become maybe one of the most important AI developers.

4:22Amrith Ramkumar:That founding group has talked a lot about the company's focus on safety. Here's CEO Dario Amadei on 60 Minutes last year. One way to think about Anthropic is that it's a little bit trying to put bumpers or guardrails on that experiment, right?

4:39Jessica Mendoza:Anthropic has tried to brand themselves as the AI good guys. They say AI could destroy the world and is too powerful and is improving too quickly, so the government needs to do all these regulations and slow it down.

4:53Amrith Ramkumar:The company supported oversight, even if it didn't seem to be in their best interest. For instance, Anthropic has lobbied in favor of state-led AI regulation. That philosophy was a good match with the Biden administration's priorities.

5:07Jessica Mendoza:The Biden administration really did focus on AI safety, transparency, and taking steps to put some guardrails up. So when the Trump administration came in and on day one basically said, we're getting rid of all of that, Anthropic fought back, and they've basically spoken publicly about the need for guardrails.

5:25Amrith Ramkumar:Here's Dario Amadei again.

5:27Jessica Mendoza:I think we do need to be raising the alarm. I think we do need to be concerned about it. I think policymakers do need to worry about it. They're the one big AI model developer that has been fighting the Trump administration on this issue and doesn't like the Trump administration's a laissez-faire approach to AI regulation. They don't like exporting advanced AI chips to China. And they speak their mind. The CEO, Dario Amadei, is one of the only notable CEOs who has spoken out consistently against Trump in this second term.

5:58Amrith Ramkumar:At the same time, Anthropic was looking to grow its business and find new customers. And one of the most high-value customers for any AI company is the U.S. military. Anthropic had already formed a partnership with Palantir, a data analytics company that has long worked with the Department of Defense and federal law enforcement. That partnership allowed Palantir to offer Claude to Palantir customers, which laid the groundwork for Anthropik's technology to be used in defense work. And in the summer of 2025, Anthropik landed a major$200 million contract with the U.S. military. The idea was that defense operations could start using Anthropik's chatbot Claude to help with their work.

6:41Jessica Mendoza:The government is trying to embed AI everywhere it can, and Anthropik's cloud models are simply too good. They're often better at things like coding or other sorts of applications.

6:54Amrith Ramkumar:The government had also granted a special level of access to Anthropik through the company's partnership with Palantir, meaning cloud could be used in classified settings. It's the only AI model that currently has that level of clearance, and getting it takes a long time. So if Anthropix says it's really concerned with safety, it's really socially conscious, that sort of doesn't strike me as the type of place that would go for a military contract. Why did the company go down that route?

7:25Jessica Mendoza:Military contracts are an enormous deal for AI companies trying to get their foot in the door with the U.S. government. AI is seen as the future technology across the board, but it has so many military applications. People talk about autonomous drones, using it to crunch numbers more efficiently. I mean, you can really embed it throughout your operations. It could be used down the road in battle. And more importantly for these companies, it's seen as just very lucrative because the military is seen as a huge, huge customer. And if they say, we like your AI better than someone else's AI, that has immense value to shareholders.

8:01Jessica Mendoza:So for all of those reasons, it's important.

8:06Amrith Ramkumar:At the time, Anthropic noted in a press release that the partnership would, quote, dramatically improve intelligence analysis and enable officials in their decision-making processes.

8:21Amrith Ramkumar:How quickly does the culture clash between Anthropic and the Trump administration start to bubble up after this contract is signed?

8:30Jessica Mendoza:Almost immediately, the tensions started running hot. Around the same time, it's important to note that the Trump administration signed an executive order about woke AI that essentially implicitly was calling out Anthropic and others that they felt their models were too woke. And if you asked it certain questions about how many genders there were or other things like that, you would get a woke response. And Anthropic was widely seen as a main target.

8:56Amrith Ramkumar:Dario Amadei has said that the company isn't woke and that Anthropic doesn't have political motivations.

9:02Jessica Mendoza:And then right away, Anthropic and the military, there were discussions about what Claude could and couldn't be used for. And in Anthropic's terms of service, it states very clearly it cannot be used for anything related to domestic surveillance. And autonomous weapons is another red line that the company has drawn.

9:20Amrith Ramkumar:Anthropic's usage guidelines prohibit Claude from being used to facilitate violence, develop weapons, or conduct surveillance. An Anthropics spokesman said the company can't comment on, quote, whether Claude or any other AI model was used for any specific operation, classified or otherwise. He added that any use of Claude is, quote, required to comply with our usage policies, which govern how Claude can be deployed. We work closely with our partners to ensure compliance. But Anthropics' stance was about to be tested. The United States just attacked Venezuela's capital, hitting military facilities in the country.

9:59Amrith Ramkumar:President Trump ordered this operation. And tensions between Anthropik and the Defense Department would spiral into a full-blown standoff. That's next.

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