OpenAI Secures Pentagon Contract Amidst AI Policy Clash with Trump Administration

Washington D.C. – February 28, 2026 – OpenAI has reached an agreement with the U.S. Department of War to deploy its artificial intelligence (AI) models on classified cloud networks, according to an announcement made by CEO Sam Altman on Friday [Reuters]. This deal comes on the same day President Donald Trump directed all federal agencies to cease using AI tools developed by Anthropic, citing concerns over restrictions the company sought regarding the apply of its technology.

Deal Details and Safeguards

The agreement with OpenAI allows the company to build its own “safety stack”—a layered system of technical, policy, and human controls—to govern the use of its AI models. Crucially, OpenAI will retain control over the implementation of technical safeguards and model deployment, limiting it to cloud environments rather than “edge systems” like aircraft or drones [CNN].

Altman emphasized that the Department of War (DoW) has agreed to OpenAI’s “red lines,” prohibiting the use of its AI for domestic mass surveillance and in fully autonomous weapon systems [Bloomberg]. He also stated that OpenAI will deploy engineers to the Pentagon to ensure the safety of its models.

Anthropic’s Contract Cancellation and Government Concerns

The OpenAI agreement follows a contentious week involving Anthropic and the Pentagon. Defense Secretary Pete Hegseth declared Anthropic a “supply chain risk” after the company refused to remove safeguards restricting its AI’s use in autonomous weapons and mass surveillance [New York Times].

According to sources within OpenAI, the relationship between Anthropic and the government deteriorated after Anthropic CEO Dario Amodei allegedly offended Department of War leadership with critical blog posts [CNN]. Anthropic had previously been the sole large commercial AI provider approved for use at the Pentagon, operating through a partnership with Palantir.

Trump Administration’s Ban on Anthropic

President Trump escalated the situation by announcing a complete federal government ban on Anthropic’s technology, effective immediately with a six-month phase-out period [CNN]. In a post on Truth Social, Trump stated, “I am directing every federal agency in the United States government to immediately cease all use of Anthropic’s technology. We don’t need it, we don’t want it, and will not do business with them again!”

Concerns Over Foreign Surveillance

During an all-hands meeting with OpenAI employees, leadership highlighted concerns about foreign surveillance as a key challenge in the negotiations with the Department of War [CNN]. While acknowledging the need for international surveillance capabilities for national security, leaders also expressed worry about AI-driven surveillance threatening democracy. Reports indicated that China is already utilizing AI models to target dissidents abroad.

Looking Ahead

Altman has urged the Department of War to extend the same terms offered to OpenAI to all AI companies, believing that reasonable agreements are preferable to legal and governmental actions [Reuters]. The situation highlights the growing tension between the potential benefits of AI for national security and the need for robust safeguards to protect privacy and prevent misuse.