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The Trump administration pulled a $200 million defense contract from Anthropic after the company refused to let its models power mass surveillance or autonomous armed drones. Defense Secretary Pete Hegseth went further, directing every federal agency to stop using Anthropic’s technology – a move that goes well beyond a single canceled deal. Anthropic is preparing a legal challenge that could set precedent for how safety-focused AI labs negotiate military procurement terms. Neither Google nor Microsoft, both deeply embedded in Pentagon AI work, have faced a comparable ultimatum, likely because neither has staked out such visible ethical boundaries. The financial cost here is concrete, and smaller labs weighing government bids will recalibrate.
