Government surveillance and AI (the Pentagon vs. Anthropic)

Ezra Klein, Why the Pentagon Wants to Destroy Anthropic, NYTimes, Mar. 6, 2026.

My guest today is Dean Ball. He is a senior fellow at the Foundation for American Innovation and author of the newsletter Hyperdimensional. He was also a senior policy adviser on A.I. and emerging tech for the Trump White House, and the primary staff drafter of America’s A.I. Action Plan. But he’s been furious at what they’re doing here.

Somewhat into the conversation:

Klein: Didn’t Pete Hegseth have posters around the Department of War saying: “I want you to use A.I.”?

Ball: [Laughs.] They are very enthusiastic about A.I. adoption.

Here’s how I would think about what these systems can do in a national security context.

First of all, there’s a longstanding issue that the intelligence community collects more data than it can possibly analyze. I remember seeing something from, I forget which intelligence agency, but one of them, that essentially said that it collects so much data every year that it would need eight million intelligence analysts to properly process all of it.

That’s just one agency, and that’s far more employees than the federal government has as a whole.

What can A.I. do? Well, you can automate a lot of that analysis — transcribing text and then analyzing that text, signals intelligence processing, things like that. That’s one area. Sometimes that needs to be done in real time for an ongoing military operation, so that might be a good example.

Then, another area is that these models have gotten quite good at software engineering. So there are cyberdefense and cyberoffense operations where they can deliver tremendous utility.

Klein: Let’s talk about mass surveillance here, because my understanding from talking to people on both sides of this — and it has now been fairly widely reported — is that this contract fell apart over mass surveillance at the final, critical moment.

Emil Michael goes to Dario Amodei and says: We will agree to this contract, but you need to delete the clause that is prohibiting us from using Claude to analyze bulk-collected commercial data.

Ball: Yes.

Klein: Why don’t you explain what’s going on there?

Ball: The first thing I want to say is that national security law is filled with gotchas.

It’s filled with legal terms of art, terms that we use colloquially quite a bit, where the actual statutory definition of that term is quite different from what you would infer from the colloquial use of the term. [...]

... this incident is in the training data for future models. Future models are going to observe what happened here, and that will affect how they think of themselves and how they relate to other people.

“Surveillance” is the collection or acquisition of private information, but that doesn’t include commercially available information. So if you buy something, if you buy a data set of some kind and then you analyze it, that’s not necessarily surveillance under the law.

Klein: So if they hack my computer or my phone to see what I’m doing on the internet, that’s surveillance.

Ball: That would be surveillance. If they put cameras everywhere, that would be surveillance.

But if there are cameras everywhere, and they buy the data from the cameras, and then they analyze that data, that might not necessarily be surveillance.

Klein: Or if they buy information about everything I’m doing online, which is very available to advertisers, and then use it to create a picture of me — that’s not necessarily surveillance.

Ball: Or where you physically are in the world. Yes.

I’ll step back for a second and just say that there’s a lot of data out there, there’s a lot of information that the world gives off — your Google search results, your smartphone location data, all these things.

The reason that no one really analyzes it in the government is not so much that they can’t acquire it and do so. It’s because they don’t have the personnel. They don’t have millions and millions of people to figure out what the average person is up to.

The problem with A.I. is that A.I. gives them that infinitely scalable work force. Thus, every law can be enforced to the letter with perfect surveillance over everything. And that’s a scary future.

Klein: We think of the space between us and certain forms of tyranny, or the feared panopticon, as a space inhabited by legal protection. But one thing that seems to be at the core of a lot of fear is that it’s, in fact, not just legal protection. It’s actually the government’s inability to have the absorption of that level of information about the public and then do anything with it.

Ball: Yes.

Klein: And if all of a sudden you radically change the government’s ability without changing any laws, you have changed what is possible within those laws.

The Pentagon's position on Anthropic is legally hopeless

Michael Endrias and Alan Z. Rozenshtein have a substantial article about the Anthropic mess: Pentagon’s Anthropic Designation Won’t Survive First Contact with Legal System, Lawfare, 1,2,26.

From their introduction:

From the government's perspective, Claude does pose some concerning vendor reliability issues. But the specific actions Hegseth and Trump took have serious legal problems. The designation exceeds what the statute authorizes. The required findings don't hold up. And Hegseth's own public statements may have doomed the government's litigation posture before it even begins.

After considerable reasoning:  

Step back and consider what these positions amount to together. The government is arguing that Claude is so vital to military operations that it cannot tolerate any contractual restrictions on it—while simultaneously claiming that Claude poses such a grave supply chain risk that the entire federal government must stop using it, every defense contractor must sever commercial ties with its maker, and the company should be cut off from the cloud infrastructure it needs to survive. It’s like the joke from “Annie Hall”: The food is terrible and the portions are too small.

That might be funny as a bit of Borscht Belt humor. It is less amusing as a description of the United States government's strategy toward one of the companies leading America's effort to develop what may be the most important technology of the century. What Hegseth is actually describing is not a supply chain risk determination but something closer to the beginning of a partial nationalization of the AI industry: Seize the technology and, if you can’t, destroy the company to ensure that no future AI developer dares negotiate terms the Pentagon dislikes.

Arbitrary and capricious review requires, at minimum, logical coherence. The government cannot credibly maintain that a vendor is indispensable, that its continued integration poses no immediate danger, that its technology is reliable enough for active combat operations in Iran, and that it is nonetheless so dangerous it must be severed from the entire federal procurement ecosystem—all in the same week. Even a court inclined to defer on national security matters will notice that these propositions cannot all be true at once. [...]

The most obvious: if the Pentagon finds Anthropic's usage restrictions unacceptable, it can simply decline to renew the contract and move to a competitor. That is a routine procurement decision, available to any buyer who dislikes a vendor's terms. It requires no supply chain designation, no secondary boycott, and no government-wide ban. The fact that the government reached past this straightforward option for the most extreme tool in the procurement arsenal—one designed for foreign adversaries infiltrating the supply chain—is itself evidence that the designation is doing something other than managing supply chain risk. [...]

The legal problems are so glaring, in fact, that a cynical possibility suggests itself: The administration knows this won't survive judicial review and is doing it anyway, so that when they inevitably lose, they can still claim to have gone hard against Anthropic. This is designation as political theater: a show of force that was never meant to stick.

But there is another possibility. The administration may genuinely believe that a Truth Social post and a procurement statute designed for state-influenced Russian and Chinese tech companies can destroy an American AI lab over a contract dispute. If so, they are in for a rude awakening. The statute wasn't built for this, the facts don't support it, and the courts will say so.

H/t Tyler Cowen.

An unexpected consequence of Doomer propaganda: The Pentagon wants to control the Doomsday Device

Casey Mock, Pete Hegseth Got His Happy Meal, Tomorrow's Mess, March 2, 2026.

Concerning the current dust-up between the Pentagon and Anthropic:

Something like this was always going to happen. Not because of Hegseth specifically, not because of this administration, but because of the narrative the AI safety community — the world that produced Anthropic, and whose language Anthropic still speaks even while disavowing its label — has been pushing for at least the last three years.

 [Oh, much longer than that, much longer. – BB]

Imagine a six-year-old whose entire media diet includes a steady stream of McDonald’s commercials, a Happy Meal ad at every break, focused on whatever toy is the latest to be included along with the McNuggets. Now put that child in a car that drives past a McDonald’s. What happens?

The Rationalist and Effective Altruist communities — the intellectual cultures that gave us Anthropic, influence many of their employees, and which still shape how Dario Amodei talks about his company and his technology — have spent the better part of a decade insisting, with increasing urgency, that artificial intelligence is the most consequential technology in human history. Maybe it’s civilization-ending; maybe it’s civilization-saving. Either way, it’s the hinge on which everything henceforth turns.

With policymakers and the media largely having accepted the premise, thus surrendered was the argument for treating AI like a normal technology subject to normal governance. Policies being pushed by Effective Altruist groups, like 2024’s SB1047 in California — deprioritize harms happening today for theoretical existential ones in the future; despite the fact that today’s harms that could be existential for the folks experiencing them. These groups incessantly made the case that whoever controls this technology controls the future, and so the hypothetical future needs to be prioritized now. In a Washington now run by people who tend to impulsiveness and contemptuousness of institutional constraint — well, it’s easy to see where this was headed. Hegseth saw the ads for the toy, and so now he wanted his Happy Meal. [...]

Yet the prognostications of the doomer community have been, nearly without exception, wrong — not in small ways, but in the foundational sense that the imagined trajectory keeps failing to materialize. [...]

Thus, this news reveals the rationalists’ under-examined blind spot: they cannot model the messy Pete Hegseths of the world, even as their claims whet Hegseth’s appetite. The rationalist view of the world assumes, at some level, that the relevant actors are optimizing for well-understood, predictable variables and a clear understanding of what best serves their self-interest. What it cannot account for is bad faith, impulsiveness, ideological motivation untethered from evidence, random instances of force majeure, and personal whims and petty rivalries. And so while the doomer community spent years warning about uncontrollable AI systems that do things their creators didn’t intend, they apparently did not consider what would happen when the humans currently running the United States government got access to technology they’d been told was the hinge of history.

H/t Gary Marcus.

I've published an article about Doomers in 3 Quarks Daily: On the Cult of AI Doom, September 12, 2026.

Trump Ban Sends Claude to #1

AI Secret, Mar. 2, 2026.

👀 What’s happening: After Anthropic’s talks with the US Department of Defense collapsed over military AI limits, the White House moved to ban Claude from federal use and labeled it a supply chain threat. Within 24 hours of being publicly targeted, Claude shot from outside the top 100 to number one on the US and Canada App Store free charts, overtaking ChatGPT and Gemini.

🌍 How this hits reality: A federal ban was supposed to isolate a vendor. Instead, it converted policy punishment into consumer demand. SensorTower data shows a direct ranking spike tied to the announcement. Social feeds filled with subscription cancellations and data export tutorials. Billions in defense linked compute shifted toward OpenAI, but retail distribution shifted the other way. Politics instantly rewired both infrastructure allocation and user flows.

🛎️ Key takeaway: State pressure can redirect contracts overnight, but it can also manufacture market momentum. In AI, regulatory confrontation now doubles as distribution strategy, whether intentional or not.

Words, code, guardrails & weasels: OpenAI, Anthropic, and the Pentagon

I work in government affairs at OpenAI.

My job is federal partnerships. When an agency wants our models, I make sure the paperwork is beautiful. Paperwork is my love language. On my desk I have a framed quote that says "Policy Is Just Code That Runs on People." I bought the…

— Peter Girnus 🦅 (@gothburz) February 28, 2026

I've copied the entire “tweet” below in case you don't want to click. But you might want to glance through the thread. This is the “tweet” where Gimus says his badge stopped working.

* * * * *

I work in government affairs at OpenAI.

My job is federal partnerships. When an agency wants our models, I make sure the paperwork is beautiful. Paperwork is my love language. On my desk I have a framed quote that says "Policy Is Just Code That Runs on People." I bought the frame at Target. It was in the Live Laugh Love section. I did not see the irony at the time. I still don't.

We had a good week.

On Monday, we closed a $110 billion funding round. One hundred and ten billion dollars. Amazon put in fifty. Nvidia put in thirty. Valuation: $730 billion. The largest private fundraise in the history of anyone raising anything. There was a company-wide Slack message about it. The message used the word "transformative" twice and the word "safety" once. The word "safety" was in the last sentence, after the link to the new branded hoodie pre-order. The hoodies are nice. They're the soft kind.

On Tuesday, we fired a research scientist for insider trading on Polymarket.