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Pentagon says it is labeling AI company Anthropic a supply chain risk ‘effective immediately’

By The Associated Press

The Trump administration is following through with its threat to designate artificial intelligence company Anthropic as a supply chain risk in an unprecedented move that could force other government contractors to stop using the AI chatbot Claude.

The Pentagon said in a statement Thursday that it has “officially informed Anthropic leadership the company and its products are deemed a supply chain risk, effective immediately.”

The decision appeared to shut down the opportunity for further negotiation with Anthropic, nearly a week after President Donald Trump and Defense Secretary Pete Hegseth accused the company of endangering national security.

Trump and Hegseth announced a series of threatened punishments last Friday, on the eve of the Iran war, after Anthropic CEO Dario Amodei refused to back down over concerns the company’s products could be used for mass surveillance of Americans or autonomous weapons.

Amodei said in a statement Thursday that “we do not believe this action is legally sound, and we see no choice but to challenge it in court.”

The Pentagon statement said, “this has been about one fundamental principle: the military being able to use technology for all lawful purposes. The military will not allow a vendor to insert itself into the chain of command by restricting the lawful use of a critical capability and put our warfighters at risk.“

Amodei countered that the narrow exceptions Anthropic sought to limit surveillance and autonomous weapons “relate to high-level usage areas, and not operational decision-making.”

He said there were “productive conversations” with the Pentagon in recent days over whether it could keep using Claude or establish a “smooth transition” if no agreement was reached. Trump gave the military six months to phase out Claude, which is already widely embedded in military and national security platforms. Amodei said it’s a priority to make sure warfighters won’t be “deprived of important tools in the middle of major combat operations.”

Some military contractors were already cutting ties with Anthropic, a rising star in the tech industry that sells Claude to a variety of businesses and government agencies. Lockheed Martin said it will “follow the President’s and the Department of War’s direction” and look to other providers of large language models.

“We expect minimal impacts as Lockheed Martin is not dependent on any single LLM vendor for any portion of our work,” the company said.

How the Defense Department will interpret the scope of the risk designation is unclear. Amodei said a notification Anthropic received from the Pentagon on Wednesday shows it only applies to Claude’s use by customers as a “direct part of” their military contracts.

Microsoft said its lawyers studied the rule and the company “can continue to work with Anthropic on non-defense related projects.”

Pentagon draws criticism for its decision

The Pentagon’s decision to apply a rule designed to address supply threats posed by foreign adversaries was met with broad criticism. Federal codes have defined supply chain risk as a “risk that an adversary may sabotage, maliciously introduce unwanted function, or otherwise subvert” a system in order to disrupt, degrade or spy on it.

U.S. Sen. Kirsten Gillibrand, a New York Democrat and member of the Senate Armed Services Committee and Senate Intelligence Committee, called it “a dangerous misuse of a tool meant to address adversary-controlled technology.”

“This reckless action is shortsighted, self-destructive, and a gift to our adversaries,” she said in a written statement Thursday.

Neil Chilson, a Republican former chief technologist for the Federal Trade Commission who now leads AI policy at the Abundance Institute, said the decision looks like “massive overreach that would hurt both the U.S. AI sector and the military’s ability to acquire the best technology for the U.S. warfighter.”

Earlier in the day, a group of former defense and national security officials sent a letter to U.S. lawmakers expressing “serious concern” about the designation.

“The use of this authority against a domestic American company is a profound departure from its intended purpose and sets a dangerous precedent,” said the letter from former officials and policy experts, including former CIA director Michael Hayden and retired Air Force, Army and Navy leaders.

They added that such a designation is meant to “protect the United States from infiltration by foreign adversaries — from companies beholden to Beijing or Moscow, not from American innovators operating transparently under the rule of law. Applying this tool to penalize a U.S. firm for declining to remove safeguards against mass domestic surveillance and fully autonomous weapons is a category error with consequences that extend far beyond this dispute.”

Anthropic sees boost in consumer downloads

While losing big partnerships with defense contractors, Anthropic experienced a surge of consumer downloads over the past week due to people siding with its moral stance. More than a million people signed up for Claude each day this week, the company said, lifting it past OpenAI’s ChatGPT and Google’s Gemini as the top AI app in more than 20 countries in Apple’s app store.

The dispute with the Pentagon has also further deepened Anthropic’s bitter rivalry with OpenAI that started when ex-OpenAI leaders, including Amodei, started Anthropic in 2021.

Hours after the Pentagon punished Anthropic last Friday, OpenAI announced a deal to effectively replace Anthropic with ChatGPT in classified military environments.

OpenAI said it sought similar protections against domestic surveillance and fully autonomous weapons but later had to amend its agreements, leading CEO Sam Altman to say he shouldn’t have rushed a deal that “looked opportunistic and sloppy.”

Amodei also expressed regret about his own part in that “difficult day for the company,” saying Thursday he wanted to “directly apologize” for an internal note he sent to Anthropic staff that attacked OpenAI’s behavior and suggested Anthropic was being punished for not giving ”dictator-like praise” to Trump.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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