The Trump administration’s push to punish a leading US AI company is undercutting the country’s plan to boost American technology.
President Trump’s decision to bar Anthropic from any work with the federal government has sparked uncertainty across the tech industry. The move comes amid a dispute between the Pentagon and Anthropic over limits on the military use of AI, raising fears of further escalation. Industry lobbyists and investors warn that such an unprecedented action against a US company could have major consequences for the entire sector.
Franklin Turner, Co-Chair of McCarter’s Government Contracts & Global Trade practice, told POLITICO that many of his clients are working to remove Anthropic from their systems, a costly effort that will harm their bottom lines. He added that the due diligence needed to ensure future partners don’t provoke the government could prove even more costly. “There’s an untold but very real administrative cost to this that affects far more companies than just the one singled out here,” said Turner.