OpenAI is a hot topic globally, amid the Iran-US war, because a deal was signed between Trump and the CEO of OpenAI. OpenAI CEO Sam Altman announced on late Friday that the company had signed a deal with the Pentagon for its AI tools to be used in the military’s classified systems.
On Monday, from OpenAI headquarters, chief executive Sam Altman said the company would add the language to its terms of service, including a specific prohibition on using its systems to spy on Americans. The deal had come to light on Friday following a fallout between OpenAI’s rival Anthropic and the Department of Defense over concerns about the use of its AI model Claude for mass surveillance and in fully autonomous weapons. But it has raised questions over how AI is used in war and how much power rests with the government and private companies.
A statement made on Saturday by OpenAI claimed its agreement with the Pentagon had “more guardrails than any previous agreement for classified AI arrangements, including Anthropic’s”. But on Monday, Altman posted on X to say further changes were being made, including making sure its system would not be “intentionally used for domestic surveillance of U.S. persons and nationals”. As part of the new amendments, intelligence agencies such as the National Security Agency would also not be able to use OpenAI’s system without a “follow-on modification” to the contract.
Sam Altman in OpenAI news updates added that the company had made a mistake by rushing “to get this out on Friday”. “The issues are super complex, and demand clear communication,” he said. “We were genuinely trying to de-escalate things and avoid a much worse outcome, but I think it just looked opportunistic and sloppy.” In financial markets, services such as a managed trading account similarly require strict oversight and transparency to maintain trust and accountability.
OpenAI has faced backlash from users following its announcement that it was working with the Pentagon. Day-over-day uninstalls of the company’s ChatGPT mobile app reportedly spiked by 295% on Saturday, compared to typical uninstall rates.
Meanwhile, Anthropic’s Claude rose to the top of Apple’s App Store ranking, where it remains on Tuesday. The AI model was blacklisted by the Trump administration after Anthropic refused to drop a corporate “red-line” principle that its technology should not be used to create fully autonomous weapons. Despite this, the use of Claude in the US-Israel war with Iran has since emerged, hours after Trump’s ban. The Pentagon declined to comment on its dealings with Anthropic.
AI is used in several ways in the military, for example, to streamline logistics or quickly process large amounts of information. The US, Ukraine, and NATO all use technology from Palantir, an American company that provides data analytics tools to government customers for intelligence gathering, surveillance, counterterrorism, and military purposes.
The UK Ministry of Defence recently signed a £240m contract with the firm. At the end of last year, the BBC spoke to some of those involved in combining Palantir’s AI-powered defence platform, Maven, into Nato. The software brings together a huge range of military information, from satellite data to intelligence reports, which can then be analyzed by commercial AI systems such as Claude to help make “rapid, efficient, and eventually more lethal decisions where that’s appropriate,” said Louis Mosley, head of Palantir’s UK operations.
But AI large language models can make mistakes, or even make things up – known as “hallucinating”. Lieutenant Colonel Amanda Gustave, chief data officer for Nato’s Task Force Maven, stressed there was human oversight, adding that they were “always introducing a human in the loop” and that it “would never be the case” that an AI would “make a decision for us”. Palantir, unlike Anthropic, does not support a blanket ban on autonomous weapons, but says there should be a “human in the loop”.
Sam Altman announced the move on Friday night. It came after an agreement between Anthropic, a rival company that is running the Claude system, and the Trump administration. The Trump administration acted up after Anthropic asked for a guarantee that its technology would not be used for mass surveillance by the government, nor for autonomous weapons systems that can harm people without human input.
Announcing the deal, Altman urged that OpenAI’s agreement with the government included expectations that it would not be used for those ends.
“Two of our most important safety principles are prohibitions on domestic mass surveillance and human responsibility for the use of force, including for autonomous weapon systems,” Altman wrote on X. He added that the Pentagon “agrees with these principles, reflects them in law and policy, and we put them into our agreement”.
Altman also said he hoped the Pentagon would “offer these same terms to all AI companies” as a way to “de-escalate away from legal and governmental actions and toward reasonable agreements”.
If OpenAI’s deal does retrain its systems for use on unethical ends, it would appear that the company has succeeded in securing a guarantee that Anthropic could not. Altman announced the deal with the government shortly after the president said he would direct all federal agencies to “IMMEDIATELY CEASE” all use of Anthropic technology.
The Pentagon had demanded Anthropic ease its ethical guidelines on its AI systems or face severe consequences.
For traders situation highlights how systems that manage multiple trading accounts in financial markets also require clear oversight, transparency, and ethical frameworks to ensure responsible operation.
For those who are wondering what is government surveillance?. Well, Government surveillance is the monitoring of individuals, groups, and populations by government agencies to detect, monitor, and analyze communications and data. It comes under national security or law enforcement needs. It includes data, geological locations, and wiretapping and covers large-scale phone records and internet communications.
Trump said on his Truth Social platform: “The Left-wing nut jobs at Anthropic have made a DISASTROUS MISTAKE trying to STRONG-ARM the [Pentagon], and force them to obey their Terms of Service instead of our Constitution.”
It remains to be seen how OpenAI staff respond to the government deal. In its battle with the Trump administration, Anthropic has drawn support from its fiercest rivals. Nearly 500 OpenAI and Google employees signed an open letter saying, “We will not be divided.”
“The Pentagon is negotiating with Google and OpenAI to try to get them to agree to what Anthropic has refused,” the letter reads. “They’re trying to divide each company with fear that the other will give in.”
Altman looks to encourage OpenAI employees in a memo sent on Friday night.
“Regardless of how we got here, this is no longer just an issue between Anthropic and the [Pentagon]; this is an issue for the whole industry, and it is important to clarify our stance,” Altman wrote in the memo.
“We have long believed that AI should not be used for mass surveillance or autonomous lethal weapons, and that humans should remain in the loop for high-stakes automated decisions. These are our main red lines.”
Altman also added in OpenAI news today: “We are going to see if there is a deal with the [Pentagon] that allows our models to be deployed in classified environments and that fits with our principles. We would ask for the contract to cover any use except those which are unlawful or unsuited to cloud deployments, such as domestic surveillance and autonomous offensive weapons.”
Anthropic, which presents itself as the most safety-forward of the leading AI companies, had been drowning in months of disagreement with the Pentagon. US defense officials had pushed for unrestricted access to Claude’s capabilities, which they say can help protect the country. Meanwhile, Anthropic has resisted allowing its product to be used for mass surveillance or for weapons systems that can kill people autonomously.
“No amount of intimidation or punishment from the [Pentagon] will change our position on mass domestic surveillance or fully autonomous weapons,” Anthropic said in its statement on Friday night.
“We have tried in good faith to reach an agreement with the [Pentagon], making clear that we support all lawful uses of AI for national security aside from the two narrow exceptions above,” the company continued. “To the best of our knowledge, these exceptions have not affected a single government mission to date.”
OpenAI on Friday said it is raising $110bn in a blockbuster funding round, valuing the company at $840bn.
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For now, the OpenAI–Pentagon arrangement sits in a gray area, and it will take time, policy oversight, and transparency to determine whether it becomes a tool for strategic defence or raises deeper concerns about surveillance and the militarization of artificial intelligence.
Disclaimer: This blog has been prepared based on available information, independent research, and analytical interpretation. It is intended solely for informational and educational purposes and should not be considered a definitive statement, official position, or final review on the subject discussed. The views presented are analytical in nature and may evolve as new information becomes available.
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