Pentagon officials see little chance of restarting human-AI trade

Emile Michael, the undersecretary of defense for research and engineering, said Monday that Anthropic’s lawsuit was an “anticipated response” and that the company’s attempts to overturn the supply chain statement would not change the Pentagon’s decision.

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“I don’t think the issue is going to be resolved this way,” Michael said in an interview with Bloomberg News.

Michael spoke just hours after Anthropic filed a lawsuit to prevent the Pentagon and other agencies from declaring the company a threat to U.S. supply chains and banning it from government contracts. In court filings earlier Monday, Anthropic claimed the move violated the company’s rights to free speech and due process under the U.S. Constitution.

A Human spokesperson had no immediate comment when asked Monday about Michael’s remarks.

Michael, a former Uber Technologies Inc. executive who now leads the Pentagon’s effort to accelerate the adoption of artificial intelligence, has been in intense negotiations for weeks with Anthropic CEO Dario Amodei over the terms of using the company’s artificial intelligence tools. Negotiations broke down about two weeks ago after the company demanded assurances that its artificial intelligence would not be used to mass spy on Americans or deploy autonomous weapons.

That prompted the Pentagon to declare San Francisco-based Anthropic a supply chain risk, a move usually reserved for companies in hostile countries. Until recently, Anthropic offered the only AI system that could run in the Pentagon’s classified cloud, and its Claude Gov tool was a top choice among defense personnel because of its ease of use.

The decision puts Anthropic’s $200 million contract to provide classified artificial intelligence tools to the Pentagon at risk and could prevent the company from collaborating with others on military work. Defense Secretary Pete Hegseth and President Donald Trump have outlined a six-month deadline for the military and U.S. agencies to transition from human artificial intelligence to other artificial intelligence providers.

Anthropic expressed concerns in a court filing that government actions have affected its work with other federal contractors. The company said a vendor it was working with to develop a custom app warned it could “pause work or even remove Crowder from existing deployments.” Anthropic said other contractors “are raising concerns, suspending cooperation, and considering terminating contracts.”

On Monday, Michael reiterated a key Pentagon complaint that Anthropic’s public stance calling for safeguards for military use suggests the company wants input into the chain of command and potential operational controls.

The company rejects that assertion and insists all military decisions are made by the Pentagon. Amodai also said Anthropic hopes to continue working with the military but wants any defense contracts to adhere to both usage restrictions.

When asked about the possibility of resuming negotiations, Michael was blunt: “The negotiations are over. We are moving on.”