Anthropic faces Friday deadline in Defense AI clash with Hegseth

Defense Secretary Pete Hegseth has told Anthropic it has until Friday evening to give the military broad access to its artificial intelligence models, CNBC confirmed on Tuesday.

If Anthropic fails to comply, Hegseth threatened to label the company a “supply chain risk” or invoke the Defense Production Act, according to sources familiar with the discussion, who asked not to be named because the matter was private.

Anthropic’s negotiations with the Department of Defense have stalled because it wants assurance that its models will not be used for autonomous weapons or mass surveillance of Americans. The DoD, meanwhile, wants the company to agree to “all lawful use cases” without limitation.

A “supply chain risk” is a designation that’s typically reserved for foreign adversaries, but it would require the DoD’s vendors and contractors to certify that they do not use Anthropic’s models. The Defense Production Act allows the president to control domestic industries under emergency authority when it’s in the interest of national security.

Hegseth set the deadline during a meeting with Anthropic CEO Dario Amodei on Tuesday morning, the people said.

“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,” an Anthropic spokesperson told CNBC in a statement.

Anthropic was founded in 2021 by a group of former OpenAI researchers and executives, and it’s best known for developing a family of AI models called Claude. The company was awarded a$200 millioncontract with the DoD last year.

Until this week, Anthropic was the only AI company cleared to deploy its models on the agency’s classified networks. Elon Musk’s xAI is now the second, as the company recently agreed to allow its models to be deployed in classified settings, according to a senior Pentagon official.

The White House’s relationship with Anthropic has been rocky since President Donald Trump returned to office, and officials have not been afraid to publicly criticize the company. David Sacks, the venture capitalist serving as the administration’s AI and crypto czar,has accused Anthropicof supporting “woke AI” because of its stance on regulation.

Losing its contract with the DoD would be a blow to Anthropic, but the company has a number of other large enterprise customers. Anthropic said earlier this month that it has more than 500 customers that spend more than $1 million on an annual basis.

The company also just got an infusion of fresh capital, as it closed a $30 billion funding round at a $380 billion valuation this month.

WATCH: Defense Sec. Pete Hegseth gives Anthropic CEO until Friday to back down on AI safeguards