After offending the Ministry of Defense, the collaboration between Anthropic and Palantir is also about to fall apart.

After offending the Ministry of Defense, the collaboration between Anthropic and Palantir is also about to fall apart.

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A Pentagon ban not only cost AI unicorn Anthropic a major military contract, but has also triggered a domino effect, forcing government “favorite” data giant Palantir to consider cutting ties completely.

According to the latest report from The Information, for over a year, Anthropic has provided services to the U.S. government through Palantir. Palantir’s clients use Anthropic’s models to identify patterns in vast confidential data to assist decision-making. However, as the Department of Defense now labels Anthropic a “supply chain risk,” the partnership is in jeopardy.

As a highly favored government contractor, Palantir earned about $4.5 billion last year, with roughly 42% from contracts with the U.S. government. If Palantir stops using Anthropic in federal work, it will cut off a source of revenue for the AI startup. Although this segment does not contribute much to Anthropic’s expected $18 billion revenue this year, losing Palantir as a key partner is undeniably a blow to Anthropic’s efforts in the large-scale client market.

Palantir May Need to Adjust Software, CEO Criticizes Anthropic

According to media citing informed sources, Palantir provides customized software and AI applications to its clients, some tailored specifically to Anthropic’s Claude model. If it abandons Claude, Palantir would have to modify its services, which could take several weeks. However, Palantir can switch to other AI model providers and generate roughly the same revenue from these contracts.

Palantir CEO Alex Karp, at a defense tech summit in Washington on Tuesday, appeared to indirectly criticize Anthropic. He accused Silicon Valley of acting against the U.S. military and warned AI companies of the risk of angering both liberals and conservatives.

“If Silicon Valley thinks we’re going to take away everyone’s white-collar jobs… and you want to harm the military, if you don’t think this will lead to our technology being nationalized, then you’re an idiot,” Karp said. “That’s the direction this path is heading.”

Last Friday, after clashing with Anthropic over restrictions on military use of its AI, Defense Secretary Pete Hegseth stated he directed the government to declare Anthropic a “supply chain risk.”

Wallstreetcn reported that the Pentagon required Anthropic to license Claude for “all legal uses”. Anthropic refused to compromise, citing concerns about “mass surveillance” and “fully autonomous weapons”.

Last Friday, U.S. President Trump posted on Truth Social that agencies like the Department of Defense using Anthropic products would have “a six-month gradual phase-out period”.

Anthropic CEO Dario Amodei argued that the designation “can only extend to use of Claude as part of War Department (the Trump administration’s preferred term for the DoD) contracts.” Legal experts say Anthropic could fully contest this designation, partly because the law typically applies to non-U.S. companies.

According to media citing insiders, Anthropic also stated last Friday it would take legal action in court against the supply chain risk designation. Since it is not yet formally in effect, Anthropic has not filed suit.

Anthropic has sought to reassure clients and business partners that the Pentagon’s decision, if implemented, would only restrict use of Anthropic’s technology by government contractors involved in U.S. military work, not every company cooperating with the federal government.

Federal Contractors Await Government Guidance

According to media citing people familiar with Palantir’s products, Palantir currently lets clients pick which AI model—such as those from Anthropic, OpenAI, and Google—to use when analyzing data collected on its platform. The Pentagon has been using Anthropic models hosted on AWS, working alongside Palantir’s software.

Sources familiar with the Pentagon’s use of these products said that besides Anthropic models, the Pentagon has already been using models from OpenAI, Google, and other providers via its Palantir software.

According to tech company employees with government business, as of this week, federal contractors are waiting for government guidance on how and whether they need to sever ties with Anthropic to keep their federal contracts.

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