Last week, a $200 million contract between Anthropic and the Department of Defense collapsed. The two parties failed to agree on the degree of unrestricted access the military would have to Anthropic’s AI systems. When the DoD subsequently struck a deal with OpenAI, it appeared the military’s relationship with Anthropic was over.
However, new reports indicate that Anthropic’s CEO, Dario Amodei, has resumed negotiations with Pentagon official Emil Michael. These talks are part of an attempt to compromise on a new contract that outlines how the Pentagon can continue using Anthropic’s AI models.
It would be surprising to see Anthropic secure a new deal, given the sharp disagreements between the parties. Yet a compromise could still appeal to both sides. The Pentagon already relies on Anthropic’s technology, and an abrupt switch to OpenAI’s systems would be disruptive.
The dispute began when Amodei voiced concern over a contract clause allowing the military to use Anthropic’s AI for any lawful purpose. Amodei asserted the company would not permit its technology to be used for domestic mass surveillance or autonomous weaponry and wanted the contract to explicitly prohibit those uses. When Anthropic refused to comply, the Department of Defense turned to OpenAI.
Since the breakdown, figures on both sides have been openly critical. Emil Michael called Amodei a liar with a God complex. Amodei, in a message reportedly sent to Anthropic staff, criticized the DoD and OpenAI CEO Sam Altman. He labeled the OpenAI deal as safety theater and called the messaging around it straight-up lies.
Amodei wrote that the main reason OpenAI accepted the DoD’s deal and Anthropic did not is that OpenAI cared about placating employees, while Anthropic actually cared about preventing abuses.
Meanwhile, Defense Secretary Pete Hegseth has pledged to declare Anthropic a supply chain risk. This would essentially blacklist the company from working with any other company that does business with the U.S. military, though he has yet to take legal action. Such a designation is typically reserved for foreign adversaries, and it is unclear whether it would survive a court challenge.