Anthropic was the Pentagon's choice for AI. Now it's banned and experts are worried

Last August, Pentagon technology chief Emil Michael , a former Uber executive and attorney, took on the added role of overseeing the Defense Department's artificial intelligence portfolio. A month earlier, Anthropic had been awarded a $200 million DOD contract that expanded its work with the agency. "I said, 'I just want to see the contracts,'" Michael told the All-In Podcast on Friday, reflecting on his early days managing the AI portfolio. "You know, the old lawyer in me." Michael's request kicked off a months-long review process that culminated in the Defense Department banning Anthropic's technology, leaving the military without its hand-picked AI models to operate in the most sensitive environments. In an extraordinary move, the DOD designated Anthropic a supply chain risk , a label that's historically only been applied to foreign adversaries. It will require defense vendors and contractors to certify that they don't use the company's models in their work with the Pentagon. Anthropic sued the Trump administration on Monday, calling the government's actions "unprecedented and unlawful," and claiming that they are "harming Anthropic irreparably," putting hundreds of millions of dollars worth of contracts in jeopardy. The DOD's sudden reversal came as a shock to many officials in Washington who viewed Anthropic's models as superior — they were the first to be deployed in the agency's classified networks — and championed the company's ability to integrate with existing defense contractors like Palantir . The decision was all the more puzzling since the Trump administration had threatened during negotiations to invoke the Defense Production Act, which could have forced Anthropic to grant the military access to its technology. "I don't know how those two things can both be true in reality," said Mark Dalton, a retired Navy rear admiral who now leads technology and cybersecurity policy at R Street, a think tank in Washington, D.C. "Something is so necessary that you n...