Pentagon warns AI contract restrictions could paralyze U.S. military operations mid-mission

Pentagon Official Sounds Alarm on AI Contract Restrictions

Emil Michael, under secretary of defense for research and engineering at the Pentagon, disclosed on Tuesday that commercial AI contracts inherited from the Biden administration contain operational restrictions so severe they could threaten military missions and paralyze U.S. military operations in real time1

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. Speaking at the American Dynamism Summit in Washington, Michael described a "holy, holy cow" moment when reviewing terms governing AI models already embedded in some of the military's most sensitive commands2

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. The US official explained that restrictive clauses in commercial AI contracts prevented operators from planning operations that could potentially lead to kinetics or explosions, with dozens of restrictions affecting commands responsible for air operations over Iran, China and South America1

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How AI Contract Terms Could Hinder U.S. Military Operations

The most alarming aspect of these commercial AI contracts involves their enforcement mechanisms. Michael revealed that if an operator violated the terms of service, the AI model could theoretically "just stop in the middle of an operation"2

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. At the time of Michael's review, Anthropic's Claude had been the only AI model available to the Defense Department on its classified systems1

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. The constraints threatened the ability to plan and execute combat operations, raising questions about whether AI tools could be reliably deployed in sensitive national security scenarios. Michael's concerns intensified after a senior executive at an unnamed AI company questioned whether its software had been used in what he called one of the most successful military operations in recent memory—Anthropic's Claude was reportedly used to help plan the U.S. government raid that captured former Venezuelan President Nicolas Maduro in January1

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Anthropic Banned as National Security Risk

The revelations help explain the recent dispute between Anthropic and the Department of Defense that culminated just days before the American Dynamism Summit. President Donald Trump banned the startup from government business and labeled it a national security risk following disagreements over how the Pentagon could use Anthropic's AI tools2

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. Defense Secretary Pete Hegseth declared Anthropic a supply-chain risk for its refusal to back down in negotiations over restrictions on autonomous weapons and mass surveillance1

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. Michael made clear the Pentagon's position: "What we're not going to do is let any one company dictate a new set of policies above and beyond what Congress has passed"2

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OpenAI Secures Pentagon Deal with Similar Terms

Hours after Anthropic's ban, rival OpenAI struck its own deal with the Pentagon, though a statement by OpenAI CEO Sam Altman suggested that the Department had agreed to similar restrictions with OpenAI's AI models1

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. This development raises questions about how the Pentagon will balance operational flexibility with ethical AI deployment. The gathering of technology companies at the summit, focused on space and national security work, underscores the growing tension between commercial AI providers and military requirements. As AI models become increasingly integrated into classified systems and combat operations, the debate over who sets the rules—Congress, the Pentagon, or private companies—will likely intensify, with implications for how the U.S. military deploys emerging technologies in future conflicts.