Anthropic CEO Dario Amodei has reopened negotiations with the US Department of Defense in a last-minute effort to preserve the company’s access to Pentagon contracts as the Trump administration considers labeling it a supply chain risk.
Amodei has been in discussions with Emil Michael, the undersecretary of defense for research and engineering, to finalize terms for military use of Anthropic’s AI models, the Financial Times reported, citing people familiar with the matter. A new agreement could let the Pentagon continue using Anthropic’s technology and avert a formal designation that would require defense contractors to sever ties with the AI developer.
The talks follow a sharp breakdown last week, when Michael reportedly called Amodei a “liar” with a “God complex.” Negotiations collapsed after the two sides failed to agree on wording Anthropic said was necessary to prevent misuse of its models.
According to an internal memo seen by the FT, near the end of talks the Pentagon offered to accept Anthropic’s broader terms if the company removed a clause restricting the “analysis of bulk acquired data.” Amodei said that phrase was intended to guard against potential mass domestic surveillance — a red line for Anthropic, along with using AI in lethal autonomous weapons.
The dispute intensified after Defense Secretary Pete Hegseth warned that Anthropic could be designated a supply chain risk, a move that would effectively bar the company from US military procurement networks.
The standoff comes despite Anthropic’s existing defense ties. In July 2025 the company won a contract worth up to $200 million from the Defense Department and became the first AI provider whose models were deployed in classified settings and by national security agencies. The US military reportedly used Anthropic’s Claude model to support a major air strike on Iran hours after President Trump ordered federal agencies to stop using the company’s systems.
Separately, tech industry groups warned President Trump in a March 4 letter that labeling a US AI company a supply chain risk could undermine American AI leadership. The groups argued that treating a domestic technology firm “as a foreign adversary, rather than an asset,” would discourage innovation and weaken the US position against China in the global AI race.
Signatories to the letter included the Software & Information Industry Association, TechNet, the Computer & Communications Industry Association and the Business Software Alliance — organizations that represent hundreds of American tech firms, including Nvidia, Google and Apple.
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