Anthropic and Trump Administration Ease Tensions Despite Pentagon's Ongoing Blacklist Battle

Blacklisted AI company Anthropic, White House ease tensions ahead of IPO, sources say

June 5 (Reuters) - A months-long dispute between Trump administration officials and AI firm Anthropic is showing signs of easing across parts of the U.S. government as the company prepares to go public, according to sources familiar with the relationship. The relationship ruptured earlier this year after Anthropic refused to allow the U.S. military to use its AI models for domestic surveillance and fully autonomous weapons systems, and the government retaliated by putting it on a national security blacklist, set to take effect later in the year. The Defense Department in March labeled the company a "supply-chain risk," the first time a U.S. company received the designation, normally reserved for companies tied to adversarial nations. The label bars tens of thousands of contractors from using Anthropic's AI when working for the U.S. military. The relationship has improved since Anthropic CEO Dario Amodei visited the White House in mid-April to discuss working together for the first time since the dispute ⁠erupted, even though Anthropic is still challenging the supply-chain risk designation in court. The Department of Defense is still "vigorously" defending itself against Anthropic's lawsuit, said Franklin Turner, an attorney specializing in government contracts. Any broader damage to the company's business is unlikely to ease until the department's dispute with the company is resolved, he said. "Anytime the government signals that it's washing its hands of a company, that's a major problem for that company," Turner said. One of the biggest signs of a thaw was symbolic but important. The White House invited Amodei to Trump's planned May 21 signing of an executive order on artificial intelligence, according to two sources familiar with the matter, though the event was later canceled because of Trump's dislike of some of the order's provisions. Trump signed the order on Tuesday; Anthropic in a statement posted on X said it looked forward to "collaborating" with the White House on implementing the order. A White House spokesperson did not respond to a request for comment about the administration's relationship with Anthropic. Anthropic's ⁠press team declined to comment. DISCUSSIONS WITH OTHER OFFICIALS Anthropic has held discussions with National Cyber Director Sean Cairncross about Mythos, its most advanced AI system, and how to protect critical infrastructure from AI-enabled cyberattacks, according to a person familiar with the matter. The company has warned that Mythos could supercharge such attacks. Critical infrastructure refers to vital U.S. economic sectors deserving of special protection from attacks, such as banks, emergency services and hospitals. Anthropic's relationship with the Trump administration is warming as it gears up for a stock-market debut that could value it at $1 trillion. CEOs ⁠of large corporations have tried to bolster relationships with the White House to avoid Trump's anger. Stronger ties could help bolster investor confidence in the short term, said Harrison Rolfes, a senior research analyst at PitchBook who covers AI companies. It's a "near-term bruise," Rolfes said, referring to the dispute. Anthropic employees met with U.S. Treasury Secretary Scott Bessent this spring to talk about Mythos and ⁠potential presidential actions on AI, according to a U.S. official. The discussions helped Trump's team develop June 2's executive order, according to the official, where Trump asked leading developers to hand over their most advanced models for cybersecurity testing. The tensions with the Pentagon have not faded entirely. Both sides were still arguing over the supply-chain risk ⁠designation as of Thursday, when they submitted briefs to the court. At the same time, Anthropic employees were not part of an April 27 Army-run AI simulation on cyberattacks, according to Army spokesperson Sean Minton, which included cyber executives from leading AI developers including Google and OpenAI, according to an Army statement. Reporting by Courtney Rozen in Washington and Karen Freifeld in New York; Additional reporting by Jody Godoy in New York; editing by Chris Sanders and David Gaffen Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Cybersecurity * Corporate Counsel * Public Policy * Data Privacy Courtney Rozen Thomson Reuters Courtney Rozen reports on the Trump administration's transformation of federal agencies and government spending. She previously worked at Bloomberg.

It Sure Seems Like Pete Hegseth Is Losing His War Against Anthropic

News broke this week that the National Security Agency (NSA) is using Anthropic's Mythos AI model for offensive cyber operations, likely against China and Iran. It makes a lot of sense, given the reported power of Mythos to find and exploit vulnerabilities. But it's just the latest sign that Defense Secretary Pete Hegseth might be losing his war against Anthropic. Anthropic has installed about half a dozen engineers at NSA, according to the Financial Times, though the newspaper reports it's unclear if Anthropic staff are actively assisting in operations against adversarial countries. At the very least, they're customizing the AI models for specific applications, according to the FT. Back in March, the Pentagon labeled Anthropic a supply chain risk because the company refused to modify the guardrails on Claude. The Defense Department wanted to use Claude without any restrictions, but Anthropic wouldn't budge on two issues: use of its AI for autonomous weapons and mass surveillance of Americans. Anthropic CEO Dario Amodei met with Hegseth on Feb. 24, but they couldn't come to an agreement and the Defense Secretary launched a crusade against the company to put it in its place. Anthropic wouldn't budge, so President Donald Trump gave his blessing to blacklist the company, setting in motion a process to purge Claude from government systems. But it doesn't seem like Hegseth's war, waged in conjunction with Emil Michael, the Under Secretary of Defense for Research and Engineering, is going so well. The argument that Hegseth and his underlings were trying to make, that Anthropic was a unique threat to national security, never made any sense. The company has been more than willing to work with the U.S. military and its allies, as has been demonstrated again and again. Amodei visited in the White House in mid-April and Reuters has a new report Friday that the dispute between Anthropic and the Trump regime has been "showing signs of easing," especially as the company prepares to go public. That's important for Anthropic as it makes an initial public offering more safe for investors if the AI company has a good relationship with the government. But it also just makes sense for the military and intelligence communities, because they want access to the most advanced AI in the world. Amodei was originally invited to the White House on May 21 for Trump's planned signing of an executive order on AI, but that was derailed after the White House decided it didn't like some of the provisions. But it will be interesting to watch the jockeying for power among the AI giants as they curry favor with Trump. OpenAI's Sam Altman and xAI's Elon Musk have their own feud going, and it can be tough to become the favorite oligarch when you have so many sociopathic billionaires in line for their government money. NOTUS published a report Thursday that Altman has been floating the idea of the government taking a stake in OpenAI with Trump ever since the start of the president's second term. The stake might be used for things "such as distributing a dividend payment to all American households," according to NOTUS, an idea that's become popular among AI enthusiasts who believe the tech will displace millions of workers and cause massive unemployment. The U.S. government has already taken a stake in at least ten companies, according to the Wall Street Journal, in a highly unusual move typically reserved for extraordinary circumstances. The U.S. has a 10% stake in Intel and a golden share in U.S. Steel. But if the government takes a stake in OpenAI it sounds like that's being pitched as something that could be used as a universal basic income or some other nominal form of financial benefit to Americans. The American people aren't getting direct payments from Intel over that investment. How wise would it be to tie the government's fortune to huge AI companies? That remains to be seen, especially as it potential sets up incentives to benefit private companies over others and intertwine the economic stability of the government with a specific form of tech. It might seem smart to have the government invested in the latest and greatest, but tech is constantly changing. Imagine if the government had invested heavily in VR headsets in the 2010s and bought Oculus, for example. The metaverse was pitched as the inevitable future, so much so that Facebook changed the name of its parent company to Meta. But that bet hasn't panned out in many ways and it's a good thing the U.S. taxpayer isn't on the hook for what was always a big gamble. Anthropic didn't immediately respond to questions emailed Friday. Gizmodo will update this article if we hear back.

Trump Administration Denies Unlawful Retaliation in Anthropic AI Blacklisting

June 8 (Reuters) - The Trump administration ⁠on ⁠Monday denied unlawfully retaliating against ⁠Anthropic, while acknowledging that U.S. agencies moved to cut off the AI company's products after it resisted Pentagon demands over military uses of its Claude chatbot, according to a court filing in a lawsuit. The filing marked the government's latest response to Anthropic's March ⁠9 lawsuit, ⁠which accuses President Donald Trump and Defense Secretary Pete Hegseth of blacklisting the company for protected speech. The U.S. Department of Justice also challenged Anthropic's lawsuit on procedural grounds, saying in a filing in San Francisco federal court that the ban is not subject to court review because the company is not challenging a "final ⁠agency ⁠action." An Anthropic spokesperson did not ⁠immediately respond to a request for comment on Monday. Anthropic in March asked a federal court in California to bar ⁠the government from placing it on a national security blacklist and to block federal agencies from enforcing the ban, saying the designation was unlawful and violated its free speech and due process rights. That lawsuit came after the Pentagon slapped a formal ⁠supply-chain risk designation on Anthropic, limiting use of a technology that two sources ⁠said was being used for military operations in Iran. Hegseth imposed the designation after the startup refused to remove safeguards preventing its AI from being used for autonomous weapons or domestic surveillance. U.S. District Judge Rita Lin in San Francisco on March 26 temporarily blocked the Pentagon's blacklisting of Anthropic. The dispute is seen as a test of the administration's power over business and whether the government or AI developers control how the technology ⁠is used. The company on June 1 said it has confidentially filed for a U.S. initial public offering. Anthropic also has a second lawsuit pending in Washington, D.C., over a separate Pentagon supply-chain risk designation that could lead to its exclusion from civilian government contracts. (Reporting by Karen Sloan; Editing by Caitlin Webber and Himani Sarkar)

Pete Hegseth Confirms Pentagon Won't Back Down On Anthropic Risk Designation As Legal Fight Continues

Defense Secretary Pete Hegseth has reaffirmed the classification of AI startup Anthropic as a national security risk, setting the stage for a court ruling on the issue. The judges had previously indicated they might delay the case until the Pentagon responded to Anthropic's request for reconsideration. However, on Wednesday, Hegseth clarified that the original supply-chain risk concerns about Anthropic's Claude stemmed from a loss of trust and other pre-deployment risks, not from any belief that Anthropic could alter the AI model in real time after deployment. Anthropic disputed the claim, saying it does not have such post-deployment control and that Hegseth's initial assessment was based on a misunderstanding. NSA Partnership Emerges Amid Dispute However, a report by the Financial Times on Friday indicated that despite the legal dispute with the Pentagon, Anthropic is working with the U.S. National Security Agency (NSA) to deploy its advanced Mythos AI model, placing several engineers inside the agency to help tailor and implement the technology for specific missions. While it is unclear whether the engineers are directly involved in active cyber operations, sources said the AI could support offensive cyber activities, including efforts to penetrate the networks of countries such as China and Iran. The Pentagon and Anthropic did not immediately respond to Benzinga's request for comments. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor. Image via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.