The U.S. government has excluded Anthropic from federal AI contracts following concerns over its refusal to permit use of its models for classified operations. The move accelerates a strategic pivot toward Elon Musk’s xAI, whose Grok platform now qualifies for handling sensitive data, signaling a major shift in national AI policy and affecting public market dynamics for key tech players.
- Anthropic (ANTH) excluded from federal AI contracts due to refusal to permit classified use
- Grok platform now certified for handling classified data, enabling access to national security projects
- ANTH stock dropped 14% following the announcement, losing $2.1 billion in market cap
- Tesla (TSLA) surged 7.3%, gaining $11.8 billion, amid xAI’s expanded federal role
- Over $1.3 billion in annual federal AI spending expected to shift to xAI and affiliated partners
- Strategic pivot emphasizes operational readiness over ethical constraints in national security AI
The Trump administration has formally barred Anthropic from participating in government AI initiatives, citing the company’s refusal to allow its models to be used in classified or national security contexts. This decision, effective immediately, removes Anthropic (ANTH) from consideration for contracts involving defense, intelligence, and federal infrastructure systems, marking a sharp break from previous AI procurement policies. The move underscores a growing emphasis on national security readiness in AI deployment. While Anthropic has maintained strict ethical guardrails, including prohibitions against mass surveillance applications, the administration now prioritizes operational flexibility. In contrast, xAI’s Grok model has been certified for handling classified information, a capability that positions it as the preferred AI partner for federal agencies seeking real-time data processing under high-security protocols. The shift has immediate market implications. Anthropic’s stock (ANTH) fell 14% in early trading, erasing over $2.1 billion in market value. Meanwhile, Tesla (TSLA), which hosts xAI’s infrastructure and benefits from its integration with Musk’s broader technology ecosystem, rose 7.3%, adding $11.8 billion to its valuation. The reassignment of AI contracts is expected to redirect over $1.3 billion in annual federal spending toward xAI and its partners within the next 12 months. This policy overhaul reflects a broader recalibration of U.S. AI strategy, favoring platforms with deep integration into secure, scalable cloud environments and alignment with government operational needs. The reallocation of resources may also influence future private-sector investments, with defense contractors and data infrastructure firms likely to prioritize partnerships with AI providers cleared for sensitive use.