OpenAI had a remarkable Friday, simultaneously announcing a new Pentagon contract and closing a $110 billion funding round that pushed its valuation to an eye-watering $840 billion. The timing was not accidental — it came just hours after the Trump administration cut off rival Anthropic over a high-profile ethics dispute.
The conflict with Anthropic began over two conditions the company placed on its AI system Claude — that it would not be used to power autonomous killing machines or conduct mass surveillance on American citizens. Pentagon officials, wanting broader military capabilities without restrictions, pushed back fiercely, ultimately triggering presidential intervention.
Trump ordered all federal agencies to immediately stop using Anthropic’s services and publicly lambasted the company on social media, calling its position a “disastrous mistake.” The dramatic public fallout created a political opening that OpenAI moved swiftly to fill.
Sam Altman announced the Pentagon deal that same night, stressing that OpenAI had secured written commitments from the Defense Department against mass surveillance and autonomous weapons use. He framed the agreement as a template for what responsible government engagement with AI should look like, and called on the Pentagon to offer identical terms to all AI companies.
As OpenAI soars financially and politically, the broader question of whether its ethical assurances will hold in practice remains unanswered. Hundreds of the company’s own employees signed a public letter supporting Anthropic, suggesting significant internal concern about the direction the company is taking.