Whatever This Is, We’ve Never Seen Anything Like It

If you’re confused about what’s happening with Anthropic, you’re not alone.

The U.S. Department of Defense decided to pick a fight with Anthropic last week, a fight that ended with Defense Secretary Pete Hegseth insisting that no one who wanted to do business with the Pentagon could continue to work with the AI company. There are still a lot of unanswered questions (and lawsuits to be filed, as Anthropic has said it will do), but there’s one thing that’s certain as the dust starts to settle: All of this is new in some form or another.

Hegseth gave Anthropic an ultimatum early last week. The defense secretary demanded that the company remove guardrails in its AI model Claude that prohibit mass surveillance of Americans and fully automated weapons. If Anthropic refused, he might invoke the Defense Production Act or designate the company as a “supply chain risk,” something that’s never been done before to an American company.

Foreign companies like Huawei have been given a similar designation under a different authority due to supply chain concerns, after the U.S. listed the Chinese electronics manufacturer as a national security threat. But Hegseth seems intent on using 10 USC section 3252 to make the supply chain risk designation, an entirely new move for a U.S. company.

As Lawfare notes, a Swiss cybersecurity company with Russian ties received the designation from the Office of the Director of National Intelligence (DNI) in 2025. Experts believe Hegseth’s legal ability to do that is much narrower than he claimed in a tweet on Friday.

Tess Bridgeman, former advisor to the Obama administration and co-editor-in-chief at Just Security, told Gizmodo that it’s unprecedented. And Hegseth’s broad insistence that he can stop other companies from doing business with Anthropic is likely being used improperly.

“A supply chain risk designation is about excluding a company from bidding for certain contracts in the most highly sensitive DoD IT systems, not prohibiting other companies (even DoD contractors) from routine business dealings with the designated company,” Brideman told Gizmodo.

Part of the problem, however, is that we have no sign Hegseth has actually done that as of Wednesday, leading some to speculate there might still be room for a deal with Anthropic. But given the way President Donald Trump and the Pentagon are talking, nobody should be banking on that.

Uncharted territory

President Trump has spent his second term pushing the boundaries of what’s considered legal, often declaring he’ll do something unprecedented and leaving legal experts scratching their heads about whether it’s even possible under existing law. That’s where the Anthropic situation seems to be resting at the moment.

Anthropic CEO Dario Amodei laid out his company’s reasons for not agreeing to the Pentagon’s terms in a letter on Thursday. Hegseth had given Anthropic a deadline of 5:01 p.m. ET on Friday, and Amodei went to the public, making his case that AI should not be used for domestic surveillance because it’s unethical, nor for fully autonomous weapons because the tech just isn’t reliable enough yet.

By Friday, Trump was the first to respond, though it wasn’t entirely clear whether Trump had intended to designate Anthropic as a supply chain risk. Nothing in his tweet explicitly said as much, and it wasn’t until Hegseth sent a tweet following the president that the terms became more obvious.

“In conjunction with the President’s directive for the Federal Government to cease all use of Anthropic’s technology, I am directing the Department of War to designate Anthropic a Supply-Chain Risk to National Security,” Hegseth tweeted.

“Effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic. Anthropic will continue to provide the Department of War its services for a period of no more than six months to allow for a seamless transition to a better and more patriotic service,” wrote Hegseth.

It’s happening whether it’s legal or not

The government is currently disentangling itself from contracts with Anthropic. Federal agencies like the Commerce Department are booting Anthropic’s products from the building, acting on orders from the president. And defense contractors like Lockheed Martin are doing the same, according to Reuters.

Greg Nojeim, the director of the Center for Democracy and Technology Project on Security and Surveillance, told Gizmodo that it’s unclear whether the Pentagon’s threats are even legal.

“The Pentagon is imposing what is essentially a secondary boycott on Anthropic,” said Nojeim. “It is cutting off not only its own contracts with Anthropic, but threatening those DOD contractors who rely on Anthropic’s AI. The threat is that they will lose their DOD contracts as well. Whether this is legal or not is going to be determined in court.”

If Hegseth and Trump get their way, Anthropic will be prohibited from working with companies like Palantir, Amazon, and Microsoft, all of which have lucrative government contracts. Lockheed Martin is reportedly working on that, along with at least 10 other unnamed companies, according to CNBC, but it’s unclear whether any other companies will put up any resistance to defend Anthropic. Whether any defend the company’s honor, Trump’s actions have already made Anthropic toxic to potential customers, to say nothing of investors who would worry about what kind of future such a company could cobble together.

Roughly $60 billion from venture capital is on the line for Anthropic, according to Axios. And it’s all because Trump and Hegseth decided to make their life hard.

“Hegseth and Trump appear to be trying to chill other companies from doing business with Anthropic using their ‘bully pulpit,’ not any viable interpretation of what their statutory authority permits,” Bridgeman told Gizmodo. “That’s an abuse of authority even if the designation were valid, but of course, the designation itself is clearly a pretext.”

Trump takes control of businesses

President Trump has inserted himself into the world of private business more than any other president in the modern era. He’s made the U.S. government take a stake in over a dozen companies, including a 10% stake in Intel. He’s publicly spoken about his desire to have Paramount Skydance buy Warner Bros. Discovery, solely because he has an ideological ally in CEO David Ellison.

Trump reportedly has plans to release two coins with his face on them for the semiquincentennial celebrations this summer. On Monday, he posted a call from a Republican congressman for his portrait to be put on a new $250 bill, something that’s illegal under federal law. There’s no subtlety with Trump. He wants to tell every business what to do and have his face on the money that Americans use to pay those businesses.

Trump is remaking the entire U.S. to conform to his desires, even if we don’t yet fully understand what those desire might be. Why does the U.S. military have an interest in mass surveillance of Americans? Leadership at the Pentagon denies it has any interest. But Anthropic’s insertion of that into the public letter released last week felt like a warning, like a hostage blinking slowly in Morse Code to tell us what’s about to hit.

Or perhaps it’s a warning of what’s already underway. The question fundamentally is what might be lawful. Can the Defense Department engage in mass surveillance of Americans? Sen. Ron Wyden, a Democrat from Oregon, thinks they can under various loopholes. Even if the best legal minds in the country decide the answer is no, what’s to stop Trump from doing it anyway?

“One would have thought the answers to these questions based on existing statutes, DoD regulations, the Constitution, and binding international law would be no,” Bridgeman told Gizmodo.

“But from the boat strikes against suspected drug traffickers, to the Venezuela operations, to the ongoing armed conflict in Iran, DoD has been engaging in activity that is patently unlawful (as directed by the President), while of course claiming otherwise. Anthropic is right to be wary of DoD claims to legality under the current administration.”

Is the problem vibes?

The Wall Street Journal posed an interesting theory Tuesday about what drove the messy breakup between Anthropic and the military: Vibes.

Claude was reportedly used for capturing Nicolas Maduro in Venezuela, and the military even utilized the AI model to help with the lead-up to the current war in Iran. Anthropic has proved itself to be unopposed to allowing its AI to be used in war. And it certainly adds to the absurdity of all of this, given that we now know President Trump had decided to go to war with Iran on Friday, before he sent that post to Truth Social, threatening Anthropic.

But the Journal tells the story of culture and personality clashes behind the scenes, where you’ve got members of the Trump regime who simply feel like the AI is somehow too “woke.” Emil Michael, the undersecretary of defense for research and engineering, tweeted last week that Anthropic was lying about claims of mass surveillance and full autonomy. But the Journal article paints a picture of a regime that’s just cranky about having to work with people who aren’t true believers in the MAGA agenda.

That feeling of wokeness isn’t something that can be made tangible in any serious way. It’s just a feeling and one that’s as good as anything else at explaining the moment we’re in.

The other oligarchs step up

OpenAI seems happy to fill the void. Even before the day was out on Friday, CEO Sam Altman tweeted that his company would agree to the Pentagon’s terms but maintained that it included safeguards against use for domestic surveillance and fully autonomous weapons.

“AI safety and wide distribution of benefits are the core of our mission,” Altman wrote. “Two of our most important safety principles are prohibitions on domestic mass surveillance and human responsibility for the use of force, including for autonomous weapon systems. The DoW agrees with these principles, reflects them in law and policy, and we put them into our agreement.”

By Monday, Altman tweeted that he had asked to amend the agreement, suggesting he didn’t really understand what he was signing on for. Altman called it a “good learning experience for me as we face higher-stakes decisions in the future,” a sentiment that should terrify anyone who thinks OpenAI will be in charge of making fully autonomous weapons now.

Where do we go from here? People seem to be waiting for a formal designation from Hegseth so that Anthropic can file its lawsuit. Other than that, expect a lot more vibe shifts and a lot of rending of garments to come from the more ideological players in Silicon Valley as they twist themselves into pretzels to make sense of all this.