So, let's start today by talking about the ongoing dispute between the Pentagon and Anthropic. And before we do that, let's make our disclosures. My boyfriend works at Anthropic and I work at the New York Times, which is suing OpenAI, Microsoft, and Perplexity. So, Casey, have you been following this story?
I have very closely because I am actually quite concerned about what it would mean for the US government to have access to the kinds of technologies they seem to want.
Yes. So, this story has been developing quickly over the past few days, but basically the latest is that the Pentagon is upset with Anthropic over the terms of a contract that they are negotiating, and they are threatening not only to drop a $200 million contract that they signed with Anthropic, but also to designate Anthropic and its models a supply chain risk, which would be a very serious, almost unprecedented escalation against a US company and it would have all kinds of implications for Anthropic's ability to work with the defense department, with contractors who work with the defense department, and so this has become a huge political battle.
Got it. Well, okay. So, tell us a little bit about the contract that Anthropic and some of these other big AI labs have with the Pentagon. How is the Pentagon using AI right now?
So, a couple ways. One is that the Pentagon has a platform where service members from all of the departments of the US military can use the various AI models that they have contracted with. So right now there are four sort of labs that are included in that. There's Anthropic, there's OpenAI, there's Google and there's xAI. And so they can use that for, you know, administrative tasks, office tasks, whatever. There's also a classified system that is run through Palantir and Amazon Bedrock, which are two of these sort of platform companies that provide access to AI models that lets the US military use Claude in specific classified situations for things like helping them capture the president of Venezuela. That was reportedly a use that Claude was involved in last month.
So, they have this contract and they want to be able to do sounds like almost whatever they want with it. What are the sticking points here?
So, I've been making some calls on this and talking to some folks who are involved in these negotiations, and it's a little unclear what exactly triggered this, but here's what I know. Earlier this year, the Pentagon reached out to all of the companies that it had contracts with, the four AI companies, and asked them to sign what they called an all lawful uses contract, which would basically strip out the usage policies that these companies have for their models when they sell them to corporate customers or let users use them and replace it with something that just says the US military is allowed to do anything lawful with these systems.
Basically whatever your terms and conditions are, we're going to strip those out and replace them with this sort of blanket use policy.
And three of the companies signed it. OpenAI and xAI and Google all signed this contract. Anthropic did not. And they asked for two changes, basically two carveouts to this policy. They said, "We don't want Claude to be used for mass domestic surveillance and we don't want Claude to be used for autonomous kinetic operations." Basically anything that would kill someone or send a weapon into a battlefield without a human in the loop supervising it. And they said, "If you just promise us that you won't do those two things, we'll be happy to sign this agreement."
Yeah. And I have to say, those don't sound like huge asks.
But it sounds like the Pentagon saw it differently.
Yes. They were very upset about this and they have started trying to kind of, you know, get some leverage in these negotiations by saying, you know, we are not only going to cancel the contract but we're also potentially going to designate Anthropic a supply chain risk. Now that is a very strong move. It is often applied to foreign adversaries. So Huawei, the Chinese tech company, was designated a supply chain risk. Kaspersky Lab, the Russian sort of antivirus malware company, has also been designated a supply chain risk. This is something that is typically reserved for companies that run in adversarial countries that have some threat to Americans. And so the military is allowed to kind of say we are not going to let any of our contractors even touch this technology.
Yeah. And just to like drill down a little bit on those two companies, the fear about Kaspersky Lab was that because it was founded in Russia, the Russian state government might try to interfere with it so that a company that was using it, maybe the Russian government would get backdoor access into an American company. With Huawei, which one of the things that it makes is it's sort of like telecom equipment, I believe. The fear is, well, maybe the Chinese government will be able to, you know, insert a backdoor into telecom equipment so they could spy on Americans. So those are the sorts of threats which I'll say those are like actually scary legitimate threats to me personally. That is what we have previously designated a supply chain risk. What you're saying is Anthropic said we don't want to do mass surveillance and we don't want to do autonomous killing and the Pentagon said that is a big risk to Americans.
Yes. And they've said that the company is, you know, basically putting, you know, the military at risk by not allowing them to do these things. And it's a little hard to know what exactly would happen if the Pentagon did declare Anthropic a supply chain risk. I've talked to some folks who think it would basically prevent any US government contractor from using Claude or any other Anthropic products inside their own systems. It seems to be a little bit more complicated than that. The latest thinking on this is that it would impact the use of Anthropic's products on Pentagon systems and Pentagon related systems. So like Google Cloud for example wouldn't be able to use Claude on any kind of systems or servers that touch Google's government contracts. But the belief is that Anthropic could still work with Google, just not on anything that kind of touches Google's government contracts.
I see. Okay. And so this is a $200 million contract that Anthropic has right now. Were they to lose that, how big of a problem is that for Anthropic?
So in like financial terms, it would not be a company killing event. Like it's a big contract, but they make billions of dollars a year in revenue. This is not sort of make or break for them. I think though that the supply chain risk designation would be a much more harmful thing for them because it would mean that if you are say Amazon and you have Anthropic as one of your providers, they, you know, they sell Anthropic's models through their services. You then have to go through all of your servers and all of your data centers and all of your sort of workflows and make sure that nothing that touches any of your government work also touches an Anthropic model. Your coders won't be able to use Claude Code to build anything for the government. Basically, it would just require a lot of untangling. And so that is why the Pentagon is using this as a threat to Anthropic, because this would be extremely annoying and costly for them.
Right. But at the same time, it seems like Anthropic believes it has some leverage here, right? Like clearly the military wants to be using Claude and they wouldn't be jumping through all of these hoops if it wasn't going to be a pain to them if they felt like they couldn't use Claude.
Yeah. I mean, that's one of the interesting things about this. I think they're facing some pushback even from within the military of people saying this would actually hurt our ability to like get our things done.
Let me ask you a question and this may just not be known, but Casey, I'm thinking back to the conversation that we had with Amanda Askell a couple weeks ago about trying to build a constitution for Claude and trying to sort of cultivate an almost like humanlike set of values inside it. And my sense from talking to Amanda is that, you know, if I went on Claude right now and say, "Hey, Claude, I'd love you to vibe code up a sort of a big domestic surveillance program with a little bit of an autonomous murder element," Claude would say, "Hey, you got the wrong chatbot. I'm not that kind of a guy," right? I'm very curious how it would even be possible to get a version of Claude that would do autonomous killing. Like that seems so far outside of what we have been told Claude even is.
Yeah. And my understanding from talking to folks involved in these negotiations is that the military is not asking for some special version of Claude, right? They don't want like Claude minus all of its morals. It's just a sticking point over this specific usage policy.
And so this is really just about the Pentagon trying to sort of force Anthropic into a configuration that it doesn't want to be in. Right? This is something that Dario Amodei and other Anthropic executives have been very clear they don't want AI systems to be able to do. And Anthropic has been a sort of willing and enthusiastic partner with the US military for quite some time. They are not objecting to that. This is not like what happened at Google with Project Maven where it was like we don't want to work with the military at all. This is them just saying these two specific things we think are very dangerous and we don't want to tie our hands when it comes to enforcing our usage policies around that.
