Anthropic faces Friday deadline in Defense AI clash with Hegseth

In a significant development, Defense Secretary Pete Hegseth has issued a firm ultimatum to Anthropic, demanding that the company grant the military extensive access to its artificial intelligence systems by Friday evening. Sources familiar with the situation, who wished to remain anonymous due to the sensitive nature of the discussions, revealed that failure to comply could result in Anthropic being categorized as a 'supply chain risk' or trigger the Defense Production Act. The negotiations between Anthropic and the Department of Defense (DoD) have reached a standstill. Anthropic is seeking guarantees that its AI models will not be utilized for creating autonomous weapons or for the mass surveillance of American citizens. On the other hand, the DoD insists on having the company agree to an unrestricted range of lawful use cases. The label of 'supply chain risk' typically applies to foreign adversaries, and if applied to Anthropic, it would compel the DoD's vendors and contractors to confirm that they do not use the company's models. The Defense Production Act empowers the president to regulate domestic industries during emergencies for national security purposes. During a meeting on Tuesday morning, Hegseth conveyed the deadline to Anthropic CEO Dario Amodei. An Anthropic spokesperson later remarked, "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." Founded in 2021 by former OpenAI researchers and executives, Anthropic is best known for its Claude AI models. Last year, the company secured a $200 million contract with the DoD, becoming the sole AI entity permitted to deploy its models on the agency’s classified networks until recently. Elon Musk’s xAI has now joined as the second company authorized for deployment in such settings. Anthropic’s relationship with the current administration has been tumultuous, particularly since the return of President Donald Trump to office. Officials, including David Sacks, the AI and crypto czar, have publicly criticized the company, accusing it of promoting 'woke AI' due to its regulatory stance. Losing its DoD contract could significantly impact Anthropic, although the company still boasts a diverse clientele, with over 500 customers each spending more than $1 million annually. Additionally, Anthropic recently closed a $30 billion funding round, achieving a valuation of $380 billion this month.