Microsoft CEO Satya Nadella speaks at the Microsoft AI Tour event in Munich, Germany, on Feb. 25, 2026
Sven Hoppe | Picture Alliance | Getty Images
Microsoft said Thursday that it will keep startup Anthropic’s artificial intelligence technology embedded in its products for clients, excluding the U.S. Department of War.
Earlier on Thursday, the federal agency informed Anthropic that it would label the company a supply-chain risk. Anthropic subsequently said it intends to challenge the move in court.
Last week U.S. President Donald Trump called for federal agencies to drop their use of Anthropic, and Secretary of War Pete Hegseth said Anthropic would keep providing its services to the Pentagon for no more than six months. CNBC has confirmed that Anthropic models played a role in U.S. airstrikes on Iran in recent days.
Microsoft is the first major company to say it will keep working with Anthropic after the Pentagon’s actions.
“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 and that we can continue to work with Anthropic on non-defense related projects,” a Microsoft spokesperson told CNBC in an email.
Microsoft supplies its technology to a variety of U.S. government agencies. The Microsoft 365 productivity software is widely used inside the Department of War. In September Microsoft said it was integrating Anthropic’s generative artificial intelligence models into the Microsoft 365 Copilot add-on for Microsoft 365 subscriptions, alongside models from OpenAI.
Many software engineers have adopted Anthropic’s Claude models for drafting source code, and they are available inside GitHub Copilot, as are OpenAI’s competing Codex models.
Microsoft CEO Satya Nadella initially sought to invest in and work closely with OpenAI. More recently, Nadella has made AI models from other developers available in Microsoft products.
“Model choice!” Nadella wrote in an October X post showing off the abiltiy to toggle between Anthropic and OpenAI models in Microsoft 365 Copilot.
In November, Microsoft said Anthropic has committed to spending $30 billion on Microsoft’s Azure cloud services, while Microsoft agreed to invest up to $5 billion in Anthropic. The numbers are larger for Microsoft’s OpenAI partnership. As of October, Microsoft held a $135 billion stake in OpenAI’s public benefit corporation, and OpenAI was committing to spend $250 billion on Azure.
This is developing news. Please check back for updates.