Anthropic CEO Dario Amodei has reportedly reopened negotiations with the US Department of Defense in a last-minute effort to secure continued access to Pentagon contracts as the company faces the possibility of being labeled a supply chain risk by the Trump administration.
Amodei has been holding discussions with Emil Michael, the US undersecretary of defense for research and engineering, to finalize terms governing the military’s use of Anthropic’s artificial intelligence models, the Financial Times reported, citing people familiar with the matter.
A new agreement would allow the Pentagon to keep using the company’s technology and could prevent a formal designation that would force contractors in the defense supply chain to cut ties with the AI developer, per the report.
The talks follow a sharp breakdown in negotiations last week. Michael reportedly accused Amodei of being a “liar” with a “God complex,” while discussions collapsed after the two sides failed to agree on language Anthropic said was necessary to prevent misuse of its technology.
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Pentagon negotiations stall over bulk data analysis clause
In an internal memo to staff seen by the FT, Amodei reportedly wrote that near the end of negotiations, the Pentagon offered to accept Anthropic’s broader terms if the company removed a clause restricting the “analysis of bulk acquired data.” He said this phrase was meant to guard against potential mass domestic surveillance, a scenario Anthropic treats as a red line, alongside the use of AI in lethal autonomous weapons.
The dispute escalated after Defense Secretary Pete Hegseth warned that Anthropic could be designated a supply chain risk, a move that would effectively freeze the company out of US military procurement networks.
The standoff came despite Anthropic’s existing ties to the defense sector. The company was awarded a contract worth up to $200 million by the US Defense Department in July 2025 and it became the first AI provider whose models were used in classified environments and by national security agencies.
As Cointelegraph reported, the US military even used Anthropic’s Claude AI model to support a major air strike on Iran hours after President Donald Trump ordered federal agencies to stop using the company’s systems.
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Tech groups warn risk label could hurt US AI leadership
Meanwhile, in a Wednesday letter to Trump, tech groups warned that labeling a domestic AI company a supply chain risk could undermine US leadership in AI. The groups argued that treating a US technology company “as a foreign adversary, rather than an asset,” could discourage innovation and weaken America’s ability to compete with China in the global AI race.
Signatories included the Software & Information Industry Association, TechNet, the Computer & Communications Industry Association and the Business Software Alliance. These organizations represent hundreds of American tech companies, including AI chipmakers Nvidia, Alphabet’s Google and Apple.
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