Who’s Drafting the AI-Government Playbook?

As Sam Altman learned on Saturday night, performing tasks for the U.S. government is a perilous undertaking at present. Around 7 p.m., the CEO of OpenAI revealed he would be answering questions openly on X, intending to clarify his company’s choice to secure the Pentagon deal that Anthropic had recently declined.

Most inquiries centered on OpenAI’s readiness to engage in extensive surveillance and autonomous lethal operations – precisely the activities Anthropic had precluded in its discussions with the Pentagon. Altman typically deflected to the public sector, stating it was not his prerogative to establish national policy.

“I profoundly believe in the democratic process,” he responded, “and that our elected representatives hold the authority, and we all must uphold the constitution.”

An hour later, he confessed his surprise that so many people appeared to disagree. “There is a more vigorous discussion than I anticipated,” Altman remarked, “regarding whether we ought to favor a democratically chosen government or private entities not subject to election having greater influence. I suppose this is a point of contention for people.”

This is a revealing moment for both OpenAI and the broader tech sector. In his Q&A session, Altman adopted a posture common within the defense sector, where military commanders and industrial collaborators are expected to yield to civilian authority.

However, what’s more indicative is that as OpenAI evolves from an extraordinarily successful consumer startup into a component of national security infrastructure, the corporation seems unprepared to handle its new duties.

Altman’s public forum occurred during a sensitive period for his firm. The Pentagon had just blacklisted OpenAI’s competitor, Anthropic, for its insistence on contractual limits concerning monitoring and automated weaponry. Days afterward, OpenAI announced its success in winning the very contract Anthropic had relinquished. Altman characterized the arrangement as a swift method to de-escalate the dispute – and it was undoubtedly profitable. Yet, he seemed ill-prepared for the extent of negative reaction it provoked from both the company’s users and its staff.

OpenAI has been collaborating with the U.S. government for years — but not in this manner. When Altman presented his arguments to Congressional committees in 2023, for example, he was primarily adhering to the social media strategy. He spoke grandiosely about the company’s transformative potential while acknowledging the hazards and enthusiastically engaging with legislators — an ideal blend for energizing investors while fending off regulation.

Less than three years later, that strategy is no longer viable. AI’s power is so evident, and its capital requirements so intense, that a more serious engagement with the government is unavoidable. The surprising element is how unprepared both sides appear to be for it.

The most immediate contention involves Anthropic itself, and U.S. Defense Secretary Pete Hegseth’s declared intention on Friday to classify the lab as a supply chain vulnerability. That menace hangs over the entire discussion like an unshot weapon. As former Trump official Dean Ball noted over the weekend, such a classification would sever Anthropic’s access to hardware and hosting collaborators, effectively decimating the company. It would represent an unparalleled action against an American corporation, and while it might ultimately be overturned in court, it will inflict harm in the interim and send shockwaves through the sector.

As Ball outlined the procedure, Anthropic was fulfilling an existing agreement under terms established years prior – only for the administration to insist on altering those terms. This goes far beyond what would be acceptable between private enterprises, and it conveys a chilling message to other vendors.

“Even if Secretary Hegseth recedes and narrows his exceedingly broad warning against Anthropic, substantial damage has been inflicted,” Ball penned. “Most corporations, political entities, and others will have to operate under the premise that tribal reasoning will now prevail.”

This poses a direct threat to Anthropic, but also presents a significant issue for OpenAI. The company is already facing intense pressure from its workforce to uphold some semblance of a boundary. Concurrently, right-leaning media will be vigilant for any indication that OpenAI is a less-than-steadfast political ally. Amidst all this is the Trump administration, endeavoring to complicate the situation as much as possible.

It could be argued that OpenAI did not intend to become a defense contractor, but due to its vast aspirations, it has been compelled to participate in the same arena as Palantir and Anduril. Forging connections during the Trump administration necessitates taking sides. There are no politically neutral participants here; gaining allies will mean alienating others. The ultimate cost OpenAI will bear, whether through lost business or departing employees, remains to be seen, but it is improbable to emerge unscathed.

It might seem odd that this crackdown is occurring at a time when more prominent tech investors occupy influential positions in Washington than ever before, yet most of them appear entirely content with partisan logic. Among venture capitalists aligned with Trump, Anthropic has long been perceived as currying favor with the Biden administration in ways that would harm the broader industry – a perception emphasized by Trump advisor David Sacks’ reaction to the ongoing conflict. Now that the inverse has transpired, few seem inclined to champion the wider principle of free enterprise.

This is a challenging predicament for any company – and while politically aligned players may gain short-term advantages, they will be just as susceptible when political currents inevitably shift. There’s a reason why, for decades, the defense sector was dominated by ponderous, heavily regulated conglomerates like Raytheon and Lockheed Martin. Functioning as an industrial arm of the Pentagon afforded them the political insulation needed to steer clear of partisan battles, allowing them to concentrate on technology without having to reset every time the White House changed leadership.

Today’s startup rivals might innovate more rapidly than their predecessors – but they are far less equipped for the long haul.