Anthropic CEO Dario Amodei arriving at the White House earlier this year.

JESSICA KOSCIELNIAK/REUTERS

Anthropic changed course after a developer backlash this week. The bigger story is what the company is still doing, and why.The startup said it will no longer secretly degrade Fable 5 responses when users ask for help on frontier AI model development. Instead, Anthropic said these requests will be routed to a less-good model, Opus 4.8, and developers will be told.This addresses the freakout over Anthropic essentially giving intentionally worse answers and lying about it. "We apologize," the company said.But Anthropic is still restricting use of its most powerful public model for certain AI development work. The company says this is about safety, arguing these limits stop "foreign adversaries" from using Anthropic's top model to erode America's edge in AI and chips.That explanation only goes so far.These restrictions also help Anthropic protect its business from distillation, or intelligence extraction. That's when rivals query a powerful model, collect its outputs, and use that data to improve their own systems. These techniques help open-source model providers catch up with Anthropic quicker, and undercut the company on price.Anthropic has warned about Chinese labs doing this. But the same threat comes from open model developers in the US and Europe, too.