AI giant Anthropic announced its annual revenue has skyrocketed past $19 billion, more than doubling its run rate from late last year. This surge is attributed to increased adoption of its AI models and products, including the coding tool Claude Code. The financial milestone comes amidst a high-stakes conflict with the U.S. Department of Defense (DoD), which has been renamed the Department of War under the Trump administration.
The dispute centers on technology guardrails for Anthropic's Claude tools used by the military. Last week, President Donald Trump announced a federal agency-wide ban on Anthropic with a six-month phase-out. Following this, Defense Secretary Pete Hegseth ordered Pentagon suppliers to purge Anthropic AI tools from their supply chains. The DoD is also considering designating Anthropic as a supply chain risk, which would effectively freeze the company out of U.S. military procurement networks.
In a significant development, major tech industry groups have publicly intervened. The Information Technology Industry Council (ITI), whose members include Nvidia, Amazon, and Apple, sent a letter to Secretary Hegseth expressing deep concern over the potential risk designation. The letter, also copied to other government parts, argued that such a move "threatens to undermine the government’s access to the best-in-class products and services from American companies" and should be reserved for genuine emergencies involving foreign adversaries. ITI CEO Jason Oxman urged the department to work through established channels like the Federal Acquisition Security Council instead.
Simultaneously, Anthropic CEO Dario Amodei has reportedly reopened last-minute negotiations with the DoD, specifically with Undersecretary of Defense for Research and Engineering Emil Michael. The talks aim to finalize terms governing the military's use of Anthropic's AI and potentially prevent the formal risk designation. Discussions had previously collapsed after a sharp breakdown, with Michael reportedly accusing Amodei of having a "God complex." A key sticking point was Anthropic's insistence on a clause restricting the "analysis of bulk acquired data" to prevent potential mass domestic surveillance, which the company treats as a red line alongside AI use in lethal autonomous weapons.
Despite the standoff, Anthropic's business momentum continues. The company is now valued at approximately $380 billion. Separately, Anthropic has signed a three-year Memorandum of Understanding with the government of Rwanda, marking its first formal multi-sector government partnership in Africa. The agreement focuses on deploying Anthropic's AI technology across public sectors like health and education.
