OpenAI reaches AI agreement with Defense Dept. after Anthropic clash
SAN FRANCISCO — OpenAI, the maker of ChatGPT, said Friday that it had reached an agreement with the Pentagon to provide its artificial intelligence technologies for classified systems, just hours after President Donald Trump ordered federal agencies to stop using AI technology made by rival Anthropic.
Under the deal, OpenAI agreed to let the Pentagon use its AI systems for any lawful purpose, a term required by the Pentagon. But OpenAI also said it had found a way to ensure that its technologies would adhere to its safety principles by installing specific technical guardrails on its systems.
“In all of our interactions, the DoW displayed a deep respect for safety and a desire to partner to achieve the best possible outcome,” Sam Altman, OpenAI’s CEO, said in a social media post, using the initials for the Department of War, the administration’s preferred name for the Defense Department.
The Defense Department did not immediately respond to a request for comment.
The deal appeared to be a business and political coup for OpenAI, taking advantage of a rival’s troubles. Anthropic, which competes with OpenAI, had battled the Pentagon in recent weeks over how its AI could be used. In negotiations over a $200 million contract, the Pentagon had demanded that it be able to use Anthropic’s AI system for all lawful purposes, or it would cut the company off from government business.
But Anthropic said it needed terms that would ensure that its AI technology would not be used for domestic surveillance of Americans or for autonomous lethal weapons. The Pentagon, in turn, said a private contractor could not decide how its tools would be used for national security. Their disagreement erupted into public view this past month and escalated as both dug in their heels.
Anthropic and the Pentagon failed to agree on terms by a 5:01 p.m. deadline Friday. Defense Secretary Pete Hegseth then designated Anthropic a “supply-chain risk to national security,” a label that cuts the AI company off from business with the U.S. government. Trump also weighed in, calling the startup a “radical Left AI company.”
Amid the maelstrom, OpenAI stepped in. This past week, Altman publicly backed Anthropic’s position that AI should not be used for domestic surveillance or autonomous weapons. On CNBC on Friday, he said he mostly trusted Anthropic and that “they really do care about safety.”
At the same time, Altman engaged in talks with the Pentagon, starting Wednesday, over a deal for its technology, said two people familiar with the discussions who spoke on the condition of anonymity.
Altman negotiated with the Defense Department in a different way from Anthropic, agreeing to the use of OpenAI’s technology for all lawful purposes. Along the way, he also negotiated the right to put safeguards into OpenAI’s technologies that would prevent its systems from being used in ways that it did not want them to be.
OpenAI “will build technical safeguards to ensure our models behave as they should, which the DoW also wanted,” Altman said.
These moves allowed Altman to uphold safety principles around AI while still landing the Pentagon contract. He added that the Pentagon had agreed to have some OpenAI employees work alongside government personnel on classified projects to “to help with our models and to ensure their safety.”
Anthropic did not respond to a request for comment on OpenAI’s deal.
(The New York Times sued OpenAI and Microsoft in 2023, accusing them of copyright infringement of news content related to AI systems. The two companies have denied those claims.)
Altman and Dario Amodei, the CEO of Anthropic, have long been bitter rivals. Amodei and several other founders of Anthropic previously worked at OpenAI. But they left in 2021 after disagreements with Altman and others over how AI should be funded, built and released.
During a recent AI summit in India, Altman and Amodei were caught on video refusing to join hands during a photo session with Prime Minister Narendra Modi.
It may take time for OpenAI’s technology to be used by the Pentagon. The company is not yet approved for classified work in part because its technologies are not available from Amazon’s cloud computing services, which is how the government often accesses classified systems.
That could change after OpenAI signed a partnership with Amazon on Friday. Amazon, a new investor in OpenAI, is pouring $50 billion into the AI startup as part of $110 billion in funding that OpenAI raised to pay for its continued growth and to fuel AI development.
OpenAI also recently signed rental agreements for more than 430,000 square feet in office space in the South Bay, according to documents on file with the Santa Clara County Recorder’s Office.
The Pentagon may also use AI services from other Anthropic rivals. Google and Elon Musk’s xAI have contracts with the Defense Department, and the Pentagon said this past week that it had reached an agreement to use xAI’s technology for classified operations.
Google has had similar discussions, but it is unclear where those talks stand. In 2018, during the first Trump administration, Google backed away from a military contract after protests from employees. It has since agreed to work with the Pentagon again.
This past week, as the Pentagon threatened to sever ties with Anthropic, dozens of OpenAI employees signed an open letter urging other AI companies to support the stance that the technologies not be used for domestic surveillance or with autonomous weapons.
“They’re trying to divide each company with fear that the other will give in,” the letter read, referring to the Pentagon. “That strategy only works if none of us know where the others stand. This letter serves to create shared understanding and solidarity in the face of this pressure from the Department of War.”
This article originally appeared in The New York Times.