Microsoft announced on Thursday that it will continue using AI technology from Anthropic for its corporate customers, despite a severe crackdown by the U.S. Department of War. The software giant said its lawyers reviewed the situation and decided that, outside of direct defense work, the partnership can move forward.
The trouble started when the federal agency informed Anthropic it would label the startup a “supply-chain risk.” This label effectively blacklists the company from certain government work. The decision followed a highly public breakdown in talks between the Pentagon and Anthropic. The two sides clashed over whether the military could use the AI for mass domestic surveillance and fully autonomous weapons.
Following the breakdown, President Donald Trump ordered all federal agencies to drop Anthropic. The Secretary of War, Pete Hegseth, gave the Pentagon a six-month deadline to phase out the company’s services. The situation is highly sensitive, as reports confirmed that Anthropic’s models were already being used to assist with U.S. airstrikes in Iran.
Microsoft is the first major tech player to publicly stand by Anthropic since the government’s blacklisting. While some defense contractors immediately told their employees to stop using Anthropic’s popular “Claude” model, Microsoft is taking a different approach.
A Microsoft spokesperson explained that while they won’t offer Anthropic’s tools to the Department of War, everyday customers using products like Microsoft 365, GitHub, and AI Foundry will still have access to them. The company emphasized that it plans to continue working with Anthropic on non-defense projects.
This decision highlights Microsoft’s strategy to offer its users multiple AI choices. While the company has a massive, $135 billion partnership with Anthropic’s rival, OpenAI, CEO Satya Nadella has recently pushed to include other models as well. In fact, Microsoft just agreed to invest up to $5 billion in Anthropic late last year. For now, it seems Microsoft values that investment enough to risk frustrating the Pentagon.
