The decision follows a move by the United States Department of War earlier on Thursday to designate Anthropic as a risk to its supply chain. Anthropic said it plans to challenge the designation in court.
In a statement, Microsoft said its legal team had reviewed the government’s action and concluded the company could continue offering Anthropic’s AI models — including the Claude system — to clients outside the defense department.
“Our lawyers have studied the designation and have concluded that Anthropic products, including Claude, can remain available to our customers — other than the Department of War — through platforms such as M365, GitHub and Microsoft’s AI Foundry,” a Microsoft spokesperson said.
The stance makes Microsoft the first major technology company to publicly commit to continuing its partnership with Anthropic following the Pentagon’s decision.
The dispute comes after Donald Trump last week urged federal agencies to stop using Anthropic’s technology. Pete Hegseth subsequently said the company would be allowed to continue supplying services to the Pentagon for no more than six months while alternatives are evaluated.
According to reports confirmed by CNBC, Anthropic’s AI models were also used in planning or analysis related to recent U.S. airstrikes on Iran.
Tensions reportedly escalated after negotiations between Anthropic and the Department of War broke down over issues including potential use of AI for mass domestic surveillance and fully autonomous weapons.
Shortly afterward, rival AI developer OpenAI announced that the Pentagon had agreed to deploy its models for classified government workloads.
Despite the controversy, Anthropic’s technology remains widely used across the software industry. Many developers rely on the company’s Claude models for generating and editing source code, including through the GitHub Copilot platform.
Microsoft previously integrated Anthropic models into Microsoft 365 Copilot, alongside competing models from OpenAI, allowing customers to switch between AI systems. Microsoft CEO Satya Nadella has promoted this approach as offering “model choice” for enterprise users.
The partnership between Microsoft and Anthropic is also financially significant. In November, the companies revealed that Anthropic had committed to spending roughly $30 billion on Microsoft Azure services, while Microsoft agreed to invest up to $5 billion in the startup.
Microsoft’s ties with OpenAI remain even larger. As of October, the tech giant held a stake worth about $135 billion in OpenAI’s public-benefit corporation, while OpenAI had pledged to spend around $250 billion on Azure infrastructure.
The latest developments highlight growing competition among AI providers as governments and major corporations decide which systems will power critical technology and defense operations.