New reports from the New York Times and the Atlantic paint a detailed picture of the final hours of negotiations between Anthropic and the Pentagon. At the center: bulk data collection on American citizens, a rejected cloud workaround, and a parallel OpenAI deal that was already in the works.

According to the Atlantic, Anthropic learned on Friday morning that Hegseth's team was prepared to make a key concession. In earlier contract drafts, the Pentagon had repeatedly tried to soften its commitments with phrases like "as appropriate," leaving loopholes for reinterpretation down the line. Those words would now be removed.

But by Friday afternoon, it became clear that a core issue remained: the Pentagon wanted to use Anthropic's AI to analyze bulk data on American citizens. According to the New York Times, the Pentagon's chief technology officer Emil Michael - a former Uber executive - specifically pushed for permission to collect and process unclassified commercial data, including location data and browsing histories. The Atlantic report goes even further, listing chatbot queries, Google search histories, GPS movement data, and credit card transactions that could be cross-referenced with one another.