President Donald J. Trump and the First Lady hosted a gathering of technology industry leaders at the White House on September 4, 2025 for discussions centered on harnessing artificial intelligence (AI) to propel the U.S. to the forefront of global innovation. Photo: The White House

Anthropic Faces Dual Crisis: Trump Imposes Federal Ban While Company Accuses Chinese Rivals of “Industrial-Scale” Theft

Despite these significant legal and geopolitical hurdles, Anthropic continues to experience explosive financial growth.

RMN Digital Corporate Desk
New Delhi | February 28, 2026

WASHINGTON / NEW DELHI — Anthropic, the artificial intelligence startup behind the Claude chatbot, is currently locked in a high-stakes battle on two fronts as it faces a sweeping federal ban from the Trump administration and prepares for a legal showdown with the Pentagon, all while accusing Chinese competitors of massive data theft.

Trump Administration Orders Immediate Phase-Out

President Donald Trump has directed all federal agencies to immediately cease using Anthropic’s technology, labeling the company’s leadership as “Leftwing nut jobs” in a sharply critical social media post. Agencies currently utilizing Anthropic’s tools have been granted a six-month window to phase them out.

The rift originated from Anthropic’s refusal to accede to Pentagon demands for expanded usage rights, with CEO Dario Amodei stating the company cannot “in good conscience” allow its AI to be used for mass surveillance or fully autonomous weapons systems. In response, Defense Secretary Pete Hegseth designated Anthropic a “supply-chain risk,” effectively barring any military contractor or partner from conducting commercial activity with the firm. Anthropic has announced it will challenge this classification in court.

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Allegations of Chinese “Distillation” Attacks

Simultaneously, Anthropic has accused three Chinese tech firms—DeepSeek, Moonshot AI, and MiniMax—of executing “industrial-scale distillation attacks”. The company alleges these labs used more than 24,000 fraudulent accounts to generate over 16 million interactions with Claude.

The goal of these interactions was “distillation,” a process where a smaller model is trained on the outputs of a more powerful one. Anthropic warned that these illicitly obtained capabilities could be integrated into foreign military, intelligence, and surveillance systems, noting that the window to stop such sophisticated campaigns is narrow.

Growth Amidst Industry Backlash

Despite these significant legal and geopolitical hurdles, Anthropic continues to experience explosive financial growth. The company recently secured $30 billion in Series G funding, skyrocketing its valuation to $380 billion. This funding follows the release of Opus 4.6, a model designed to automate complex professional tasks like generating business documents and spreadsheets.

The company’s predicament has split opinions across Silicon Valley:

Elon Musk, CEO of xAI, lashed out at Anthropic, calling them hypocrites and alleging they are “guilty of stealing training data at massive scale”.
Sam Altman, CEO of OpenAI, voiced support for Anthropic, stating he largely trusted the company’s intentions regarding its safety concerns.
Critics within the tech community have called Anthropic’s stance “ironic,” arguing the company itself trained its models on the open internet using copyrighted data without explicit permission.