Donald Trump orders federal phase-out of Anthropic technology

Feb 27, 2026

President Donald Trump ordered all federal agencies to cease using Anthropic's AI technology and implement a six-month phase-out after the company refused Pentagon demands for unrestricted access to its models by a Friday 5:01 p.m. ET deadline. Anthropic, which held a $200 million Pentagon contract for classified work signed in July, sought assurances against use for fully autonomous weapons or mass domestic surveillance. Defense Secretary Pete Hegseth designated Anthropic a national security supply chain risk, which the company vowed to challenge in court. Senator Mark Warner condemned the move as potential contract steering toward a preferred vendor, amid concerns about Elon Musk's influence—Trump's biggest 2024 financial backer who owns competing AI firm xAI and recently attacked Anthropic on social media.

Trump's order to phase out Anthropic technology across federal agencies

▪Defense Secretary Pete Hegseth ordered the Pentagon to designate Anthropic a Supply-Chain Risk to National Security after Donald Trump's order.
▪Senator Mark Warner condemned Donald Trump's directive to halt the use of Anthropic across the federal government.

Anthropic's contract dispute with the Pentagon over AI usage restrictions

▪Anthropic signed a $200 million contract with the Pentagon in July.
▪OpenAI signed a $200 million contract with the Pentagon last year.
▪The Pentagon's deadline of 5:01 p.m. ET Friday passed without an agreement with Anthropic.
▪The Pentagon set a deadline of 5:01 p.m. ET Friday for Anthropic to agree to demands that the U.S. military be allowed to use the technology for all lawful purposes.

Political and competitive implications involving Elon Musk's xAI

▪Elon Musk was Donald Trump's biggest financial backer in the 2024 election.
▪Senator Mark Warner raised concerns that Donald Trump and Pete Hegseth may be attempting to steer contracts to a preferred vendor whose model federal agencies have identified as a reliability, safety, and security threat.