Anthropic Warns Pentagon Ban Could Cost $2B in Defense Contracts, Nebius Shares Surge on Nvidia Backing

Anthropic has issued a stark warning that a proposed ban by the U.S. Department of Defense on its AI systems could cost the company up to $2 billion in anticipated defense contracts over the next three years. The warning comes amid growing scrutiny over the use of generative AI in national security applications, with Pentagon officials evaluating risks related to data integrity and model transparency. The company emphasized that the ban would not only impact its direct revenue but also undermine its ability to scale secure AI solutions for government clients. In a contrasting development, Russian-based AI infrastructure provider Nebius reported a 27% spike in stock value following confirmation of a $400 million investment from Nvidia. The capital infusion is expected to accelerate Nebius’s expansion of AI data centers across Eastern Europe and the Middle East, with a focus on deploying next-generation GPU clusters powered by Nvidia’s H200 and B200 chips. The investment underscores investor confidence in AI infrastructure beyond traditional U.S. and Chinese hubs. The divergence in market reactions highlights a broader trend: while geopolitical tensions create headwinds for AI firms with U.S. government ties, strategic investments in non-traditional AI ecosystems are fueling growth. Analysts note that the $2 billion figure cited by Anthropic reflects not just lost deals but a potential shift in defense procurement policy toward more tightly regulated AI vendors. NVIDIA (NVDA) remains a central player in the AI infrastructure race, with its stock gaining 1.8% on the news. Meanwhile, defense contractor shares, including those of Northrop Grumman (NOC) and Raytheon (RTX), saw modest declines, reflecting investor caution over evolving AI procurement rules. The crude oil benchmark (CL=F) edged up 0.6% as markets absorbed the broader tech volatility.