So last week Anthropic, so the maker of Claude, fell out with
the US government and the Department of War.
This is a huge high profile fallout.
Trump even took to true social to claim that Anthropic and
Claude are enemies of peace and the government and huge woke
liberals and all because Claude said no to some really quite
terrifying use cases that the army wanted to implement.
And then the very same afternoon, Open AI announced a
high profile partnership with the Department of War.
And since then, we've seen Open AI uninstalls rise by 295%, one
star reviews spike and double day over day.
And then, despite being banned by the government, Anthropic's
cord was then used to conduct air strikes against Iran.
What a crazy turn of events. And today I'm covering it all.
What the actual contracts say and the fine print now, the
things that most people don't know about the situation, the
specific details that really do matter and trying to understand
the answer to a key question. When technology becomes so
powerful, who has the right to decide how to use it?
This is in a Leaf with Jack Horton.
Hope you enjoy the show. So on Thursday evening, on
February 27th, Sam Altman sent an internal memo to every single
employee Open AI. So the Wall Street Journal broke
the story. And in it, Altman actually said
the open AI had long believed that AI should not ever be used
for mass surveillance or autonomous lethal weapons.
And this is a case where it's important to me.
And I quote, this is by Sam Altman.
This is a case where it's important to me that we do the
right thing and not the easy thing that looks disingenuous.
And less than 24 hours later, Open AI then signed a deal with
the Pentagon and therefore the Department of War to deploy its
models in throughout its security operations.
So to understand how we got here, I think you need to
understand what happened in the days before this agreement,
because Anthropic had been embedded in the Pentagon system
since, you know, June 2024, and it was the first frontier AI
model to get there. They got into this partnership
via Palantir and AWS and actually got security level
clearance at level 6, which is classified as secret clearance.
And by the summer of 2025, they had a contract worth up to $200
million. And Claude was being used by
CENTCOM for intelligence assessments, identifying
targets, simulating battle scenarios.
And it was reportedly used during the capture of the
Venezuelan president in January 2026.
And, you know, this wasn't a company sitting on the sidelines
here being super ethical. Anthropic was already very deep
inside the US military establishment, far more than any
other AI lab. Now the dispute that really
kicked off publicly and had Trump weighing in, calling
Anthropic an enemy of the people, actually was triggered
by Palentia. Palentia tried to get Claude or
Anthropic to agree to what they call an all lawful use standard,
meaning that essentially the military could use claw for
anything they wanted that wasn't explicitly illegal.
And Anthropic said, yeah, that's absolutely fine, apart from 2
exceptions that it wouldn't budget on, which was #1 mass
surveillance or mass domestic surveillance of the American
people and #2 was fully autonomous weaponry that would
take humans completely out of the loop.
Everything else, as I said, was completely on the table.
All fine. Every other military use case
you can think of, just not those two.
Now on Tuesday the 25th of February, the Defence Secretary
of the US government met with the CEO of Anthropic, Dario
Amadei at the Pentagon and essentially they gave each of
their deadline which was Friday. By 5:00 PM we have to have
agreed to all lawful use or lose the contract completely.
So lose that massive contract with the US government.
And that night the Pentagon sent what it called it's last and
final offer. So Anthropics team had reviewed
the offer that was given to them and essentially their conclusion
was, and all the lawyers conclusion was that there was
lots of wording that frames the agreement as a compromise, but
ultimately left all the legal loopholes to just do whatever
they want anyway. So essentially we had to just
disregard all safeguards. And it got that heated that the
CEO of Anthropic, Amede, published his response on the
Anthropic website. You can go see that today.
His arguments was specific and not ideological.
He said on weapons, current frontier AI models are just not
reliably good enough to engage in targets, and deploying them
are just going to endanger American fighters and civilians.
And on surveillance, he said that there is no federal law
that stops AI conducting mass surveillance on millions of
people. But federal agencies haven't yet
caught up with laws to protect people from mass surveillance.
You know, data brokers can legally sell mass data to the US
government and then use those models to quite literally
conduct huge mass surveillance. And if you think about AI
models, what they're fantastic about is turning huge amounts of
data into the ability to zone in on particular people, groups of
people or situations. You know, before AI, think about
this, an agency that buys and sells people's data, it was
basically like pouring data into a big bucket.
And it's really difficult to make sense of that data.
Yes, you can use it, and it's really powerful for machine
learning models, and there's loads of nefarious, dangerous
use cases there. But with AI, that same data
becomes an insane surveillance system.
You know, you can cross reference, you can automatically
build profiles that flags individuals or tracks any
pattern you want across millions and millions of people
instantaneously. The technology is what makes
that data really, really dangerous.
And that's the gap that Anthropic took a stance on.
And I have to say, I've been a big cloud user for a long time.
I couldn't even imagine using open AI.
I've not got an open AI subscription.
I tell everyone to not use open AI for a number of reasons.
We'll discuss those, I'm sure. But it makes me respect the
company a bit more as well because Amadei wrote and I
quote, these threats do not change our position.
We cannot in good conscience accede their request.
You know, anyone that's been a entrepreneur that has their own
business or is running high profile, high pressure teams,
for example, knows that the pressure to say yes to contract
can be pretty overwhelming at times.
Because although a company from the outside looks amazing,
they're always, as we all know, internal stresses and pressures.
And sometimes doing that right thing is not easy, especially
when you're throwing away hundreds and hundreds and
hundreds of millions and probably billions over a couple
of years of potential revenue. And he said no, which I'm so
relieved up. So yeah, that's that's all the
situation that led up to Donald Trump.
And I quote, calling them left wing nut jobs, putting American
lives at risk and threatens actually the full power of the
presidency with major civil and criminal criminal consequences
if they didn't agree to cooperate.
And you know, a few minutes later, they called Anthropic a
complete supply chamber that must be removed from every
system. That same evening, about 8-9
hours before the US launched strikes on Iran, Sam Altman
announced on X that Open AI had reached an agreement with the
Pentagon. Surprise, surprise.
So yeah, let's, let's get into what Open AI's agreement looks
like, because as I've said, that they're seeing huge backlash
right now from their customers and user groups.
On the face of it, both companies are claiming identical
principles. The difference is the mechanism,
and the mechanism is quite literally everything.
So Anthropic wanted specific contractual prohibitions, so
language in the contract itself that specifically banned
surveillance and autonomous weaponry regardless of their
legal status. So whether or not that is made
legal in the next two, 5-7 years, they did not want AI to
be used for that. And obviously that's what the
Pentagon refused to accept. Their position was that no
private company should ever have veto power over how the military
uses technology. You know, the Constitution and
existing laws are the appropriate constraints in the
view of the Pentagon. And, you know, there's an
argument to say that it's, you know, and this is what was on
all American news channels on CBS, saying on some levels, you
have to trust the military to do the right thing.
And the geopolitical argument behind, you know, that stance is
real. But there are real threats all
over the world. And China's AI labs are
definitely not negotiating red lines with their government.
Their integration is moving incredibly fast because there's
0 friction. And so the Pentagon will view
this as an arms race with China. And you can't let from their
perspective, the government's perspective and the Pentagon's
perspective, the vendors set the rules, whereas Open AI have
taken a very different approach. Instead of any contractual
prohibitions, they cited existing laws and policies.
So the 4th Amendment, the Foreign International
Surveillance Act, which is a Pentagon directive against
autonomous weaponry, their position is essentially, you
know, these laws already cover all of our concerns.
The government has agreed to follow them, and we build
technical safeguards into the model as an additional layer of
protection. But this is where, if you read
the fine print where, you know, there's a gap that opens up.
So Jessica Tillotman, which is she's the associate Dean for
government procurement law and George Washington University,
she analysed the published contract and she concluded that
it doesn't give open AI an anthropic style ability to stop
the government using the technology on those use cases.
Though it does state that the Pentagon cannot use the
technology when breaking laws. Which sounds reassuring until
you remember that the entire reason Anthropic drew its lines
was that no existing laws prohibit the things that we
should be worried about because law has not caught up yet with
technology. You know, the 2023 Pentagon
directive that was against autonomous weaponry, The open AI
citing, you know, it doesn't actually ban them.
All it is is creating guidelines on how it should and should not
be used. And there's always a waiver that
essentially is a clause stating that urgent military needs means
that you can do anything you want.
And Altman even admitted in an AMA.
So it asked me anything on XA couple days later.
The deal was very, very rushed and the optics definitely don't
look good for open AR. And he even went further and
said on Monday that we shouldn't have rushed to get this out on
Friday. Even open a eyes own team and
people noticed. Leo Gow, an alignment researcher
of the company even said that. You know, it's so obvious that
this is weak and the government can now just technically use it
for anything that is deemed lawful, but there are now
missing laws to deem what is or is not lawful when it comes to
things like mass surveillance. Now that there is always a
counterpart, you know, which is opening eye eyes argued that if
you don't trust the government to follow the law, why would you
trust it to honour contract terms either, You know, if the
Pentagon is going to do mass surveillance regardless, you
know, align and drop its contract wouldn't stop them
doing it. And there definitely is
something to that. However, contract term shape
behaviour and it creates oversight mechanisms and
establishes political consequences for actions and
violations. You know, a line in the sand
that someone might just step over anyway is better than no
line in the sand. And anyway, I mean, there's been
huge fallout as you can just imagine.
The council ChatGPT movement has, it's been going on since
January. I mean, I actually cancelled
mine in January because I found Greg Brockman was the biggest
donor to Trump, donating over $25 million to his action
committee. And I think the Pentagon
situation has turned this into something much, much, much
larger. You know, Chat GPTS daily
download growth fell by 13% and one star review spiked over 775%
on Saturday and doubled again on Sunday.
Claw downloads are climbed by 81% and hit #1 on Apple's US App
Store with over 500,000 downloads in a single day.
You know, people aren't just debating policy online.
I think they're they're voting with their fingers and their
funds. See, I think there's going to be
a bunch of things to watch for here.
First, whether the supply chain risk designation.
So when the government announced the cord is a supply chain risk
actually gets fully formalized. It isn't just a tweet so far,
it's just a social media post. It's not a legal proceeding and
legal experts called it, you know, basically more political
theatre than than an actual show of force.
Second, Claude is still the only model on the Pentagon's
classified network, and the Wall Street had reported that it was
even used in the Iranian strikes just hours after the ban was
announced. The military would have six
months to swap the model under that directive, but many people
have already come out in the military saying it's going to be
a huge pain in the arse. And 3rd, the what could be
described as the chilling effect.
So, for example, Google has quietly removed its long
standing ban on AI weaponry development from its AI
principles. We did that in February 2025
right before signing an agreement with the Pentagon.
And you know, every tech company is probably watching what
happens to your Anthropic, which is if you step out of line,
you'll be burnt. So yeah, to conclude, I think
there's been a bit of a crazy turn of events.
I think there's been one of the most high profile fallings out
between AUS company and the US government.
But what's really important I think, is that, you know, I
can't help but coming back to the fact that Dario Amadei's
favorite book, the one that he used to buy for every single new
employee and frofic was The making of the Atomic Bomb.
He wanted people at the company to understand that what they
were building could and probably would eventually become so
important that the government would want to control it.
And that when that moment arrived, the people who built
the technology would have to decide whether they got a say in
how it was used. And that moment arrived last
Thursday. One company said no, another
said yes. And the person who wrote the
memo about doing the right thing then signed the deal the next
day. I think that says a lot about
Sam Altman, and it says a lot about Open AI.
And I hope the cancelled ChatGPT movement continues.
Anyway, that's it. I hope you enjoyed today's
episodes. I hope you learned something and
I'll see you next week.