GEOFF BENNETT: The standoff between the artificial intelligence firm Anthropic and the U.S.

government escalated sharply today.

President Trump lashed out at the company's leadership and directed all federal agencies to stop using Anthropic's products.

And the Pentagon designated the company a supply chain risk to national security.

William Brangham joins us now with more -- William.

WILLIAM BRANGHAM: That's right, Geoff.

Anthropic had long said that it didn't want the U.S.

military using one of its programs for any fully autonomous weapons systems or for any mass surveillance of American citizens.

Negotiations were ongoing this week, but the president's order seems to have brought them to an end.

The Pentagon's designation would bar any company that does business with the Department of War from doing any commercial business with Anthropic.

For more on what this could mean, we are joined by the University of Pennsylvania's Michael Horowitz.

He previously worked in the Defense Department, where he wrote the Pentagon's policy on artificial intelligence weapons systems.

Michael Horowitz, so good to have you here.

I wonder if you could just give me your first -- your reaction to this, to the president saying, we are wiping Anthropic completely out of the federal government and that any Pentagon contractor that also has dealings with Anthropic has to stop those as well.

MICHAEL HOROWITZ, Former Defense Department Official: What a day.

I think that the -- my initial thought, frankly, is that that escalated quickly and that what seemed like a needless dispute between Anthropic and the Pentagon has hit crisis proportions.

I say needless dispute because Anthropic was the first of the frontier A.I.

labs willing to work with the Defense -- willing to work with the Pentagon in a classified environment.

And all of the projects that the Pentagon has asked the Anthropic to work in, Anthropic was happy to work on.

This was a theoretical dispute about future possibilities that between -- between Anthropic and the Pentagon that has now really escalated.

The president's order, in combination with the order from Secretary Hegseth, could not just be devastating to the Pentagon's ability to use Anthropic's technology, but could be devastating to Anthropic's core business, depending on how it's interpreted by the markets and whether Anthropic is able to get -- I'm not a lawyer, but Anthropic is able to get a stay of the supply chain designation.

WILLIAM BRANGHAM: What does this do to America's ability to keep up a robust defense?

I mean, Anthropic was already being used in many parts of the Pentagon, according to reports.

So, now if the president is saying, get it all out of there, what does that do to our ability to maintain a defense?

MICHAEL HOROWITZ: Anthropic's technology wasn't just being used in parts of the Pentagon.

It was being used in other parts of the government as well.

So this could be pretty devastating in some ways.

The only thing that mediates that is the six-month time period that appears both in the president's announcement and in the supply chain designation by Secretary Hegseth.

If you wanted to be an optimist about the chances that the two sides will come to a deal, the optimistic read would be, in some ways, this sets a six-month clock for negotiations between Anthropic and the government.

But that -- you have got to squint real hard in some ways to see that optimistic read.

And the winner, in some ways, if Anthropic and the Pentagon can't make it work, frankly, is China, because the -- in a world where there's been intense A.I.

competition between the United States and China, and that includes the military realm, it should be all hands on deck for the American frontier A.I.

labs to work with the Pentagon to improve American national defense.

And Anthropic's have been willing to do that.

Over a six-to nine-month period, then you would imagine some of the other A.I.

labs will try to cycle in and pick up some of that business if nothing can be done.

Note that Elon Musk's xAI has already stepped up to the plate and said last week that they were willing to now work in the classified environment with the Pentagon on defense challenges.

WILLIAM BRANGHAM: That's right.

It's hard to imagine that there's not a whole slew of other companies willing to step into the breach there.

I want to ask you about this request, though, that Anthropic was making.

They were saying, we're happy for you to use our product, except in these two instances.

And I wonder what you make of that request.

It's hard to think of another defense contractor, a Northrop Grumman, saying, we will sell you jets, but you can only use them in certain ways.

MICHAEL HOROWITZ: Absolutely.

I mean, this was what really escalated the dispute between Anthropic and the government, was Anthropic's insistence that their technology not be used for mass surveillance or autonomous weapon systems, although, to be clear, this did not bother the Pentagon when Anthropic -- when they signed the original contract with Anthropic less than a year ago.

This is something that really escalated after Anthropic asked Palantir, actually another leading technology company, about whether Anthropic's technology was used in the Maduro raid in January, where some -- where Palantir's Maven Smart System technology was used, and that platform incorporates some of Anthropic's technology.

And so we were off to the races from there.

In some ways, this is a dispute about personalities and about the role of government masquerading as a policy dispute, because, in a normal atmosphere, Anthropic would decide they want to work on some issues for the Pentagon, but not other issues, and the Pentagon would hire Anthropic to work on some things, but not other things.

It would find other vendors.

But this escalated to the point where the department was threatening to either compel them with the Defense Production Act or impose that supply chain designation.

WILLIAM BRANGHAM: As you said, what a day.

Michael Horowitz from the University of Pennsylvania, thank you so much for being here.

MICHAEL HOROWITZ: Thanks for having me.