Anthropic is reportedly back in talks with the Defense Department

"The two of them were trying to work out the contract over the use of Anthropic's models before negotiations broke down and the government soured on the company. The Times reports that they couldn't agree on language that the AI company wanted to see to ensure that its technology will not be used for mass surveillance."

"In a memo sent to Anthropic staff, Amodei reportedly said that the department offered to accept the company's terms if it deleted a specific phrase about 'analysis of bulk acquired data.' He continued that it 'was the single line in the contract that exactly matched' the scenario it was 'most worried about.'"

"Anthropic, which first signed a $200 million deal with the department in 2025, refused to comply with the Pentagon's demands. The agency then threatened to cancel its existing contract and to label it a 'supply chain risk,' a designation typically reserved for Chinese companies."

Anthropic CEO Dario Amodei is resuming negotiations with the US Defense Department to prevent the government from labeling the company a supply chain risk. The dispute centers on contract language regarding the use of Anthropic's AI models, specifically disagreements over safeguards against mass surveillance. The Pentagon offered to accept Anthropic's terms if the company removed language about analyzing bulk acquired data—the exact provision Anthropic considered most critical for preventing misuse. After Anthropic refused the Pentagon's demands, the agency threatened to cancel their existing contract and impose the supply chain risk designation. President Trump subsequently ordered government agencies to cease using Anthropic's technology, though a six-month phase-out period remains in effect.

Read at Engadget