00:00We begin with breaking news, Anthropic blacklisted.
00:03President Trump moments ago pulling the plug on the government's use of Anthropic AI technology
00:08as we are now crossing tonight's 5 p.m. deadline for a deal.
00:12At issue, the Department of Defense demand that Anthropic allow full use of its AI technology
00:17without guardrails, something Anthropic has refused to do,
00:19even at the risk of losing its military contract valued at some $200 million.
00:24President Trump posting on Truth Social just moments ago,
00:27directing federal agencies to immediately cease all use of Anthropic's technology,
00:32writing, quote,
00:33There will be a six-month phase-out period for agencies like the Department of War
00:37who are using Anthropic's products at various levels.
00:40Anthropic better get their act together, he writes,
00:43and be helpful during this phase-out period,
00:45or I will use the full power of the presidency to make them comply, unquote.
00:50We've got our reporters covering this and a lot more for you tonight.
00:53Bloomberg's Michael Shepard, Becca Wasser are in Washington.
00:56Julie Fine in Texas, where the president currently is,
00:59and Nora Melinda covering markets for us here in New York.
01:02We begin with Mike Shepard.
01:04We saw it coming, Mike, and here we are.
01:05It's 5.01 p.m.
01:07Is this over?
01:09You know, nothing is really over until Donald Trump says it is.
01:13And on one level, he really closed the door.
01:15He said that, Anthropic, it's time for you to go.
01:18You have six months to leave town.
01:20You're off the federal government payroll.
01:22You are out of the federal government's networks.
01:26And yet, we have seen Trump reverse course in a number of other things in the past.
01:30And if Anthropic is in some way willing to capitulate to meet the Pentagon's demands
01:36or satisfy whatever additional concerns that Trump may be raising on his own,
01:41this is the first time we have heard him weigh in on this dispute, Joe.
01:45We could see perhaps yet another reversal.
01:47But right now, it's a pretty final word from the president, at least at this moment.
01:52What does this mean for the other AI companies?
01:55Shep, they've been talking to Google about Gemini.
01:58I believe they've already cleared Grok from XAI for classified use.
02:02What comes next?
02:04Well, Joe, that really is a great question,
02:05because all of these AI companies are not only looking for all that commercial
02:09and civilian business out there across a number of industries,
02:13they are also looking at the main industry here in Washington, and that is the U.S. government,
02:18which has always been a lucrative source of business and income and contracts
02:22for a number of other industries.
02:24So this is a message to them as well, that they need to get aboard.
02:28For Elon Musk and XAI, it may be a little bit easier road to hoe in that case.
02:35But if you are open AI, it could be a little bit tougher.
02:38We heard Sam Altman in a memo yesterday to his employees that Bloomberg has seen.
02:44He said that, look, we are interested in exploring classified work with the Pentagon,
02:48but we would like for the government to abide by some of the same restrictions
02:52that Anthropic has been fighting for.
02:55So we will want to see how those kinds of negotiations pan out.
02:58And OpenAI, for now, unlike XAI and Anthropic,
03:03has not been cleared for classified work on Pentagon.
03:06I see. The president is using some pretty colorful language as typically seen in a post like this.
03:13Mike, the left-wing nutjobs at Anthropic, he says, have made a disastrous mistake
03:17trying to strong-arm the Department of War.
03:19I don't know if that's an accurate depiction of the company's posture here,
03:23but if they, in fact, are labeled a supply chain risk
03:26and they lose this contract worth $200 million,
03:30does Anthropic still have a business?
03:33Well, they would still have a business on the commercial side.
03:36When you compare the size of that contract with their overall commercial revenue run rate,
03:41it's vast.
03:43We're talking about $14 billion in commercial revenue for the company.
03:48So it's really just a fraction of that.
03:51And yet there is the reputational question
03:53and what it might with a spillover or the blast radius might be
03:57with other partners that also have federal work.
04:01So far, the Pentagon has not declared the company a supply chain risk.
04:05So far, it really does spell out as just no more federal contracts for you.
04:10You're out of the system.
04:11But we're not getting that broader warning that other companies are forbidden
04:16from doing business with Anthropic if they also have federal work.
04:20the state of ź°ģ¬ķ©ėė¤, since we just had
04:20you're out of the business because you're not talking about
04:20all sorts of good things to do your business in my community. Thank
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