In its fight with the Pentagon, Anthropic confronts one of the biggest crises of its five-year existence

AI company Anthropic is facing perhaps the biggest crisis in its five-year existence as it stares down a Friday deadline to remove restrictions on how the U.S. Department of War can use its technology or face the possibility that the Pentagon will take action that could cripple its business.

Pete Hegseth, the U.S. secretary of war, has demanded that Anthropic remove restrictions it currently stipulates in its contracts that prohibit its AI models being used for mass surveillance or from being incorporated into lethal autonomous weapons, which can make decisions to attack without human intervention. Instead, Hegseth wants Anthropic to stipulate that its technology can be used for “any lawful purpose” that the Department of War wishes to pursue.

If the company does not comply by Friday, Hegseth has threatened to not only cancel Anthropic’s existing $200 million contract with his department, but to have the company labelled a “supply chain risk,” meaning that no company doing business with the Department of War would be allowed to use Anthropic’s models. That could eviscerate Anthropic’s growth—just as the company, which is currently valued at $380 billion, has been seeing significant commercial traction and is contemplating an initial public offering as soon as next year.

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