Satya Nadella has a lot invested in Anthropic. Which is what makes his July 2026 criticism of the company’s practices so interesting to watch.
The Microsoft CEO publicly called out AI model providers, with Anthropic as his primary example, over what he described as a fundamental contradiction in how frontier AI companies treat data. His core argument: these companies claim fair-use rights over publicly available data when training their models, then turn around and restrict customers from using those same models for distillation, while also holding onto rights over customer interaction data.
The hypocrisy argument
Model distillation is the process of training a smaller, cheaper model by having it learn from a larger one. Anthropic, like most frontier AI labs, permits its models to learn from vast swaths of human-generated internet content under a fair-use rationale. These same companies then restrict what customers can do with model outputs, including using those outputs to train competing or internal models. Customer interaction data, meanwhile, may be retained by the provider under terms buried in enterprise agreements.
The export control backdrop
