I’ve been debating how deep to go on the Anthropic vs. White House story given that it’s not directly e-commerce related, but it’s the biggest story in tech right now and the outcome will inevitably ripple across the industry — including to e-commerce firms that rely on AI infrastructure. So with that said, I want to recap what’s been happening and why it matters.
How it started…
Anthropic had been working with the Department of Defense under a contract that included guardrails preventing its AI from being used for mass surveillance of Americans or fully autonomous weapons systems. The DOD pushed back, arguing it should be able to use AI for any “lawful” purpose without restrictions imposed by a private contractor, and when Anthropic refused to remove those limits, the Pentagon labeled the company a “supply-chain risk,” which is a designation typically reserved for foreign adversaries like China. Bitter much?
The Trump administration then ordered all federal agencies to cease using Claude and begin a six-month phaseout, after which OpenAI immediately stepped in to sign a deal with the DOD to fill the gap faster than your ex-wife’s “best guy friend” after the divorce.
The Wall Street Journal reported that Anthropic’s Claude had been used in active military operations, including the raid that led to the arrest of Venezuelan leader Nicolás Maduro and for intelligence assessments and targeting in the U.S.’s ongoing conflict with Iran.
Now you’re caught up to the beginning of last week when all this happened…
- Anthropic filed two federal lawsuits challenging the designation and contract cancellations, arguing the Pentagon exceeded its authority and was retaliating against the company, which it definitely was.
- Anthropic warned that the moves could cost it billions of dollars in 2026 revenue, citing specific contracts already being paused or reduced by private sector clients spooked by the designation.
- 37 researchers from OpenAI and Google, including Google DeepMind chief scientist Jeff Dean, filed an amicus brief supporting Anthropic.
- Microsoft filed its own amicus brief warning that the designation would disrupt government contractors that had integrated Anthropic products and may leave some with no alternatives.
- The State Department shifted its internal StateChat tool from Claude to GPT-4.1 following the presidential directive.
- Google announced it would provide its Gemini Agent Designer to the Pentagon for unclassified work, and is negotiating to place it on classified systems, despite Google employees simultaneously signing the amicus brief supporting Anthropic.
- Pentagon CTO Emil Michael publicly ruled out any renewed negotiations and accused Claude of “polluting” the defense supply chain with embedded policy preferences.
- Palantir CEO Alex Karp publicly confirmed that his company is still using Anthropic’s Claude to support the war in Iran despite the Pentagon blacklist, though it eventually plans to add other models.
- A judge moved the hearing from April 3 up to March 24 after Anthropic argued urgency, while the Justice Department declined to commit to not taking retaliatory actions, such as issuing an executive order targeting Anthropic, before the hearing date.
Meanwhile, the court of public opinion has already made its ruling. Within days of the Pentagon blacklist, Anthropic surged to the number one spot on the Apple App Store, overtaking ChatGPT for the first time ever, while ChatGPT uninstalls surged 295% and a viral “Cancel ChatGPT” campaign spread across Reddit and X. By March 2nd, Claude had 11.3 million daily active users , up 183% from the start of the year, with its daily US downloads surpassing ChatGPT’s for the first time.
