Pentagon Cancels Anthropic AI Deal Over Use Dispute

The U.S. Department of Defense has ended an estimated $200 million AI prototype contract with Anthropic. The deal collapsed over a dispute about how the Pentagon could use Anthropic's AI models. Anthropic's CEO, Dario Amodei, insisted on two conditions: no fully autonomous weapons systems and no domestic mass surveillance. This meant the AI could not make final firing decisions or track American citizens. However, the Department of Defense rejected these limits, demanding "all lawful uses" for the technology. They argued that modern combat requires automated reaction speeds and that existing U.S. law permits certain surveillance activities. Defense Secretary Pete Hegseth then designated Anthropic a "national security supply-chain risk." This dispute highlights the tension between AI ethics and national security.