Reviewed by Gotrade Internal Analyst
Gotrade News - Elon Musk's AI venture xAI has officially signed a deal with the Pentagon to allow its model, Grok, into the U.S. military's classified systems. The move comes as the Department of Defense ramps up its conflict with Anthropic, which until now has been the sole AI provider for the military's most sensitive intelligence and battlefield operations, according to Axios on Tuesday (24/02).
Anthropic's Claude has been the only AI model operating inside the Pentagon's classified environment. The model was even deployed in real military operations, including through Anthropic's partnership with Palantir Technologies.
Key Takeaways:
- xAI agreed to the Pentagon's "all lawful purposes" standard that Anthropic has refused, clearing the way for Grok to enter classified military systems
- The Pentagon is threatening to label Anthropic a "supply chain risk" if it keeps its AI safety guardrails in place
- Google and OpenAI are also in active talks to break into the classified space
The core of this dispute boils down to one thing. The Pentagon wants AI providers to greenlight their models for "all lawful purposes" with zero additional restrictions.
Anthropic has flatly refused that standard. The company is standing firm on blocking Claude from being used for mass surveillance of American citizens and the development of fully autonomous weapons.
xAI took the opposite approach by agreeing to the Pentagon's terms without pushback. The deal has been signed, though xAI itself has stayed quiet and declined to comment on the reports.
Pentagon Ready to Drop the Hammer on Anthropic
Defense Secretary Pete Hegseth is set to host Anthropic CEO Dario Amodei at the Pentagon on Tuesday (24/02). Sources familiar with the meeting expect the atmosphere to be anything but friendly.
According to Axios, a Defense official said Hegseth would essentially be laying down an ultimatum for Amodei. The Pentagon is threatening to brand Anthropic a "supply chain risk," among other potential penalties, if the company keeps refusing to strip its safety guardrails.
Defense officials themselves acknowledge that ripping out Claude from military systems would be a seriously difficult process. That alone reveals just how deeply Anthropic's model is woven into the U.S. intelligence infrastructure right now.
The Scramble for the Classified Space
Outside the classified realm, AI models from Grok, Google Gemini, and OpenAI's ChatGPT are already available on the military's unclassified systems. Now all three are jockeying for position in the classified space that Anthropic has dominated.
The Pentagon has been fast-tracking negotiations with Google and OpenAI as a contingency plan in case things with Anthropic fall apart for good. One source said the Pentagon had "reached out to OpenAI to reignite talks with a new sense of urgency."
That said, another source indicated that a deal with OpenAI is still "not close" due to the complex issues involved. The administration has also made it clear that both Google and OpenAI will need to agree to the same "all lawful purposes" criteria.
This marks a pivotal chapter in the relationship between the AI industry and the U.S. military. Anthropic's decision to hold the line on its ethical boundaries is now facing direct pressure from the world's largest defense establishment, while competitors like xAI are seizing the opening left behind.
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Reference:
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Axios, Musk's xAI and Pentagon reach deal to use Grok in classified systems. Accessed on February 24, 2026
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