Anthropic is reportedly trying to reach a new deal with the US Defense Department, which could prevent the government from labeling it a supply chain risk. According to Financial Times and Bloomberg, Anthropic CEO Dario Amodei has resumed talks with the agency over the use of its AI models. In particular, the publications say that Amodel is having discussions with Emil Michael, the Under Secretary of Defense for Research and Engineering.

The two of them were trying to work out the contract over the use of Anthropic’s models before negotiations broke down and the government soured on the company. The Times reports that they couldn’t agree on language that the AI company wanted to see to ensure that its technology will not be used for mass surveillance.

In a memo sent to Anthropic staff, Amodei reportedly said that the department offered to accept the company’s terms if it deleted a specific phrase about “analysis of bulk acquired data.” He continued that it “was the single line in the contract that exactly matched” the scenario it was “most worried about.” Anthropic, which first signed a $200 million deal with the department in 2025, refused to comply with the Pentagon’s demands. The agency then threatened to cancel its existing contract and to label it a “supply chain risk,” a designation typically reserved for Chinese companies. President Trump ordered government agencies to stop using Anthropic’s technology afterward. However, there’s a “six-month phase-out period” that reportedly allowed the government to use Anthropic’s AI tools to stage an air attack on Iran.

Amodei also said in the memo that the messaging OpenAI has been trying to convey is “just straight up lies,” the Times reports. He hinted, as well, that one of the reasons his company is now on the outs with the government is because he hasn’t “given dictator-style praise to Trump” like OpenAI’s Sam Altman has.

If you’ll recall, OpenAI announced that it reached an agreement shortly after it came out that Anthropic was having issues with the agency. Its CEO, Sam Altman, said on Twitter that he told the government Anthropic shouldn’t be designated as a supply chain risk. He said during an AMA on the social media website that he didn’t know the details of Anthropic’s contract, but if it had been the same with the one OpenAI had signed, he thought Anthropic should have agreed to it. Anthropic’s Claude chatbot rose to the top of Apple’s Top Free Apps leaderboard after OpenAI announced its Defense Department contract, beating out ChatGPT.

Altman later posted on X that OpenAI will amend its deal with language that explicitly prohibits the use of its AI system on mass surveillance against Americans. When it comes to the military’s use of its technology, though, CNBC says that Altman told staffers that the company doesn’t “get to make operational decisions.” In an all-hands meeting, Altman reportedly said: “So maybe you think the Iran strike was good and the Venezuela invasion was bad. You don’t get to weigh in on that.”