Skip to content
CityAM
Main navigation
  • News
    • News
      • Latest Business News
      • Economics
      • Politics
      • Tech
      • Banking
      • FTSE 100 Live
      • Retail
      • Insurance
      • Legal
      • Property
      • Transport
      • Markets
    • From our partners
      • AON
      • Bayes Business School
      • Canada BIDs
      • Central London Alliance CIC
      • Destination City
      • Halkin
      • Olympia
      • Inside Saudi
      • Tottenham Hotspur Stadium
      • Santander X
      • YEAR SIX Dividend
    • Featured

      Ask the Expert: Should I go part-time or pay for nursery?

      Marianna Hunt discussing financial strategies at a business conference, wearing a professional suit, engaging with the aud...

      Submit a story

      Tell us your story.

      Submit
  • Opinion
  • Sport
    • Latest Sports News
      • Sport
      • Sport Business
    • From our partners
      • The Morning Briefing: SBS x CityAM
      • Aramco Team Series
      • LIV Golf
    • Featured

      Fifpro accused of leaving footballers ‘in the cold’ by doing deal with Fifa

      Business professionals in a conference room discussing strategies, with a presentation screen displaying key business metr...

      Submit a story

      Tell us your story.

      Submit
  • Life&Style
    • Life&Style
      • Life&Style
      • Toast the City Awards
      • The Magazine
      • Travel
      • Culture
      • Motoring
      • Wellness
      • The RED BULLETiN
      • Do it with Shared Ownership
      • Media Speak Hub
    • Featured

      The best places to eat sandwiches in Lisbon, from bifanas to pregos

      Bifana do Afonsos famous bifana sandwich showcasing tender pork in a freshly baked roll with savory sauce.

      Submit a story

      Tell us your story.

      Submit
  • Investec
  • Events
  • Latest Paper
Tuesday 03 March 2026 5:54 pm

OpenAI rewrites Pentagon AI deal following backlash

By: Saskia Koopman

Tech Reporter

Add as a preferred source on Google
Sam Altman discussing OpenAIs ChatGPT advancements at a press conference, emphasizing AI innovation and future developments
Open AI has filed for an IPO

OpenAI has amended its newly signed contract with the US Department of War after chief executive Sam Altman admitted the original announcement “looked opportunistic and sloppy”.

The news triggered fears the company’s technology could be used for domestic mass surveillance.

The San Francisco-based AI firm signed the agreement with the Pentagon on Friday, hours after rival Anthropic was blacklisted by the Trump administration and designated a “supply chain risk” following a dispute over safeguards.

But just days after, the ChatGPT owner was forced into damage control.

In a post on X late Monday, Altman said the company would “explicitly” bar its systems from being “intentionally used for domestic surveillance of U.S. persons and nationals”.

Intelligence agencies like the National Security Agency would also require a “follow-on modification” before being allowed to use OpenAI’s models under the contract.

“We shouldn’t have rushed to get this out on Friday”, Altman wrote. “The issues are super complex, and demand clear communication. We were genuinely trying to de-escalate things and avoid a much worse outcome, but I think it just looked opportunistic and sloppy.”

Rivalry spills into Washington

This follows mounting rivalry between OpenAI and Anthropic, and underlines just how entangled AI has become with the US military strategy.

Anthropic’s chief executive, Dario Amodei, had refused to drop what he described as corporate “red lines” prohibiting the use of its Claude model for “mass domestic surveillance” or “fully autonomous weapons”.

US defence secretary Pete Hegseth retaliated by dubbing Anthropic as a supply chain risk, effectively barring Pentagon contractors from doing business with it altogether.

Donald Trump backed the move, calling Anthropic “leftwing nut jobs”, and ordering federal agencies to phase out its technology over the next six months.

Anthropic said it would challenge any such designation in court, claiming it was “legally unsound and set a dangerous precedent”.

Despite being dropped, Anthropic’s bot, Claude, has surged in popularity. It climbed to number one on Apple’s US App Store free app rankings over the weekend, overtaking ChatGPT.

Anthropic said “every single day last week was an all time record for Claude sign-ups”.

On the other hand, day-over-day uninstalls of ChatGPT jumped by nearly 300 per cent on Saturday compared with a typical nine per cent.

What’s more, a “delete ChatGPT” campaign trended on social media, with critics accusing the company of enabling military surveillance.

Read more

OpenAI listing plans hit as Altman scraps robotics spin-off idea

Sam Altman discussing OpenAIs ChatGPT advancements at a press conference, emphasizing AI innovation and future developments

Guardrails come under scrutiny

When announcing the deal, OpenAI said the contract had “more guardrails than any previous agreement for classified AI deployments”.

The AI heavyweight reiterated that one of its red lines was “no use of OpenAI technology to direct autonomous weapons systems”.

Nearly 900 employees across OpenAI and Google have signed an open letter titled “we will not be divided”, warning that the Department of Defence was attempting to pressure AI firms into loosening safeguards.

“They’re trying to divide each company with fear that the other will give in”, the letter wrote. “We hope our leaders will put aside their differences and stand together to continue to refuse the DoW’s current demands for permission to use our models for domestic mass surveillance and autonomously killing people without human oversight.”

OpenAI’s former head of policy research, Miles Brundage, questioned how the company secured a deal that Anthropic considered ethically untenable.

Posting on X, he wrote: “OpenAI employees’ default assumption here should unfortunately be that OpenAI caved and framed it as not caving”.

Similarly, back in 2018, Google abandoned its involvement in project maven, a Pentagon initiative using AI to analyse drone footage, after thousands of employees protested.

AI on the battlefield

AI has already been embedded across Western military infrastructure.

The US, Ukraine and NATO have been using analytics platforms like Palantir, which places big datasets into systems that can then be analysed by commercial AI tools.

Louis Mosley, head of Palantir’s UK operations, has said these systems allow for “faster, more efficient, and ultimately more lethal decisions where that’s appropriate”.

NATO officials have claimed that there is “always a human in the loop” and that AI systems would “never” make final decisions completely unsupervised.

But once these models are integrated into these networks, oversight becomes harder to verify and to maintain.

Professor Mariarosaria Taddeo of Oxford University said that with Anthropic out of the Pentagon’s ecosystem, “the most safety-conscious actor” was now “out of the room”. “That’s a real problem”, she added.

Meanwhile, Trump has threatened to use the Defence Production Act to compel compliance from AI firms and warned Anthropic it could face “major civil and criminal consequences” if it did not cooperate.

And elsewhere, reports suggest Google is in talks to bring its Gemini AI model into classified Pentagon systems.

Read more

‘Delighted to be wrong’ – Sam Altman changes tune on AI job apocalypse fears

OpenAI chief executive Sam Altman emphasised the Stargate project’s significance.

Share this article

  • Facebook
  • X
  • LinkedIn
  • WhatsApp
  • Email

Similarly tagged content:

Sections

  • News

Categories

  • Business

People & Organisations

  • AI
  • Anthropic
  • ChatGPT
  • Claude
  • OpenAI
  • pentagon
  • surveillance
  • us defence
  • US military

Trending Articles

  • London Tech Week sums up everything wrong with UK tech

  • Inflation expectations at record high in interest rates signal

  • KPMG’s Summer Friday half-day rollback signals deeper woes for Big Four giants

  • UK economy falters as deeper damage to growth to come

  • New Gluten-Free Bread Binder Simplifies the Recipe — and Boosts Bread Quality

More from CityAM

  • OpenAI listing plans hit as Altman scraps robotics spin-off idea

    Tech
    Sam Altman discussing OpenAIs ChatGPT advancements at a press conference, emphasizing AI innovation and future developments
  • ‘Delighted to be wrong’ – Sam Altman changes tune on AI job apocalypse fears

    Tech
    OpenAI chief executive Sam Altman emphasised the Stargate project’s significance.
  • OpenAI files to go public as the race between tech giants heats up 

    Investing
    Sam Altman discussing OpenAIs ChatGPT advancements at a press conference, emphasizing AI innovation and future developments
  • Anthropic files for IPO as race with OpenAI heats up

    Tech
    Anthropics AI technology showcased at a tech conference, highlighting innovative advancements in artificial intelligence
  • Claude was the nice guy of AI – what changed?

    Opinion
    Claude AI interface showcasing advanced features in a business setting
  • Londonmaxxing: Capital reclaims European tech crown as money floods into AI and fintech

    Tech
    Googles modern Kings Cross headquarters showcasing innovative architecture in Londons dynamic tech district
  • Google taps markets for $30bn AI cash call

    Tech
    Googles modern Kings Cross headquarters showcasing innovative architecture in Londons dynamic tech district
  • London AI jobs boom as Anthropic salaries hit £630k

    Tech
    Anthropics AI technology showcased at a tech conference, highlighting innovative advancements in artificial intelligence
  • Terms & Conditions
  • Privacy Policy
  • Cookie Policy
  • News
  • Markets & Economics
  • Politics
  • Opinion
  • Life&Style
  • Personal Finance

Follow us for breaking news and latest updates

  • Facebook
  • X
  • Instagram
  • LinkedIn
Copyright 2026 CityAM Limited