A high-stakes AI ultimatum is unfolding inside the Pentagon as Secretary of War Pete Hegseth warns artificial intelligence firm Anthropic to lift military use restrictions on its Claude system by Friday or risk losing a $200 million contract. The dispute centers on whether private companies can impose limits on lawful military applications of advanced AI tools.
Claude is currently the only advanced commercial AI model operating within the Pentagon’s classified networks under a summer 2025 agreement. Pentagon officials insist defense operations cannot hinge on a contractor that reserves the right to restrict lawful uses of its technology. One senior official stated the department’s position “has nothing to do with mass surveillance or autonomous targeting” because “there’s always a human involved and the department always follows the law.”
During a Tuesday meeting, Hegseth reportedly told Anthropic CEO Dario Amodei that failure to comply could trigger termination of the contract, designation as a supply chain risk, or possible invocation of the Defense Production Act. Such measures could limit Anthropic’s access to federal vendors or compel cooperation under national security authorities.
Anthropic denies questioning specific military operations and maintains its restrictions focus on preventing fully autonomous weapons or mass surveillance of Americans. In a statement, the company said: “Anthropic CEO Dario Amodei met with Secretary Hegseth at the Pentagon this morning. During the conversation, Dario expressed appreciation for the Department’s work and thanked the Secretary for his service. 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.”
Pentagon officials noted Elon Musk’s Grok AI chatbot has agreed to permit use for all lawful purposes, and other firms are nearing similar arrangements. The outcome of the AI ultimatum could shape how the military integrates advanced AI into national defense systems.
