Anthropic ban may threaten the military's AI advantage over China

• Alienating a leading American AI company and ripping and replacing existing tech could give other countries, especially China, a leg up.

Driving the news: AI's use in Venezuela, leading to the capture of strongman Nicolas Maduro, and in Iran, still ongoing, gives the Defense Department highly sought-after real-world experience.

• "One of the biggest differences between the United States military and China's military is America's extensive operational experience. This just adds to the ledger," Michael Horowitz, a former Pentagon official, told Axios.
• That said, if the "dispute between Anthropic and the Pentagon makes it harder for the U.S. to access cutting-edge AI technology," Horowitz added, "it could undermine the benefits from some of that operational experience."

Between the lines: That dispute centers, in large part, on how and when Anthropic's tools would be used. The Defense Department, for its part, argues such misgivings could paralyze the military and endanger troops.

• "As I started to look at the contracts that had been written during the last administration for the use of AI, I had a whole 'holy cow' moment," Emil Michael, the department's chief technology officer, said Tuesday at the American Dynamism Summit in Washington.
• "[There were] dozens of restrictions, and yet these AI models were baked into some of the most sensitive and important places in the U.S. military, where we do exercise combat power."

State of play: Defense Secretary Pete Hegseth said the decision to blacklist Anthropic was "final" and the company's relationship with the government and military has "permanently altered."

• But as of Tuesday afternoon, no formal supply chain designation had been sent, as the administration continued to rely on Claude for operations in Iran.

How it works: The department has for years employed artificial intelligence, autonomy and automation.

• The applications extend from intelligence parsing to image recognition to drone warfare to less-splashy boardroom-style decision-making.
• But those applications are no substitute for testing the technology on the actual battlefield.

Reality check: Losing Claude may not necessarily mean losing the hard-earned AI advantage.

• "While ripping out Anthropic and replacing it with a comparable model ... brings some disruption, I think the technology is enough in its infancy that putting in place alternative systems will be sufficient to support DOD's overall military AI objectives," Steven Feldstein​​​​ at the Carnegie Endowment for International Peace told Axios.

The bottom line: The Pentagon isn't going to stop using AI on the battlefield.

• It just may end up being a competition between the top frontier labs over who jives with the Trump administration the best.