Defense Secretary Pete Hegseth will terminate Anthropic’s $200 million contract with the military by Friday unless the artificial intelligence lab agrees to loosen its safety standards.

The threat came on Tuesday during a meeting between Hegseth and Anthropic CEO Dario Amodei, according to a person with direct knowledge of the meeting who was not authorized to speak publicly.

For months, Amodei has insisted that using AI for domestic mass surveillance and AI-controlled weapons are ethical lines the company will not cross, calling such use “illegitimate” and “prone to abuse.” According to a source familiar with the Hegseth meeting, Amodeo stressed those positions again on Tuesday.

Hegseth has said Anthropic needs to allow the U.S. to use its AI in all “lawful” purposes, which could include AI-directed warfare and for surveillance. The Defense Department did not immediately respond to a request for comment.

According to the source with knowledge of the meeting, Hegseth said officials will use the Defense Production Act, a law from the 1950s usually invoked during national emergencies to force companies to produce certain products considered critical to national security, or label Anthropic a “supply chain risk” if it continues to balk at the Trump administration’s demands.

Anthropic’s hard-line on domestic surveillance and AI weapons has been labeled “woke AI” by Hegseth and other Trump administration officials. White House AI czar David Sacks helped draft an executive order last year that targeted tech companies over the claim.

AI experts say “woke AI” is a nebulous and ill-defined term that Trump officials seem to be using to describe any and all safety protections on powerful AI tools and the belief that AI chatbots have liberal bias baked into their models.

Competing AI firms such as OpenAI and Google have agreed to have their AI tools used in any “lawful” scenarios, as has Elon Musk’s xAI, which this week was approved for use in classified settings.

The Pentagon awarded Anthropic, Google, OpenAI and xAI contracts each worth up to $200 million last summer, but Anthropic was the first to be cleared for classified use after Defense officials considered it the most advanced and secure model for sensitive military applications.

News Source : https://www.opb.org/article/2026/02/24/hegseth-threatens-to-cancel-anthropics-dod-contract/