The US Defense Department has given artificial intelligence company Anthropic a Friday deadline to open its technology for unrestricted military use or face drastic action like being labelled a supply-chain risk or being forced to comply under emergency federal powers, media reports said Tuesday.

The move comes after US Defense Secretary Pete ⁠Hegseth met Anthropic CEO Dario Amodei to discuss a conflict that has now spanned months.

The standoff began when Anthropic refused to let its Claude models be used to conduct US domestic surveillance or in fully autonomous weapons systems.

Pentagon's ultimatum to Anthropic

Anthropic has continued to raise ethical concerns about unchecked government use of AI.

The AP news agency cited a source familiar with Tuesday's meeting, who said that the talks between Hegseth and Amodei were cordial.

However, the source added that Anthropic dug its heels in the face of pressure from the Pentagon in regards to two areas — the use of its tools for fully autonomous military targeting operations and mass domestic surveillance of US citizens.

"We continued good-faith conversations about our usage policy to ensure Anthropic can continue to support the government's national security mission in line with what our models can reliably and responsibly do," the AI company said in a statement.

But reports later said that the Pentagon had issued the ultimatum to Anthropic to agree to ease its usage restrictions for military purposes by Friday at 5 p.m. (2300 CET) or face being forced to comply under the Defense Production Act — which gives the federal government extensive powers to direct private industry to prioritize national security needs.

Several news agency sources said an action against Anthropic could also include other options such as the AI lab being designated a supply-chain risk.

The label is usually reserved for firms from rival nations and could severely damage the company's ability to work within the US government.

US military embraces AI

The Pentagon has been negotiating AI contracts with a number of large language model providers that would determine the future of the application of artificial intelligence models in warzones.

Last year, the Pentagon said that it was awarding defense contracts to four AI companies, including Anthropic, Google, OpenAI, and Elon Musk's xAI.

Each contract is valued at up to $200 million (€169 million).

Edited by: Dmytro Hubenko