Anthropic being blocked, so what? Analyst: Palantir (PLTR.US) is still the "iron throne" of the Pentagon.

Analysts point out that despite the recent ethical dispute between the US Department of Defense and the AI startup company Anthropic, the core position of Palantir (PLTR.US) under the leadership of Alex Karp in the US military is unlikely to be shaken - the two sides have established a cooperative relationship since 2024. After weeks of negotiations, US President Trump ordered federal agencies to stop using Anthropic's AI tools and cancelled over $200 million in contracts last Friday. US Secretary of War Pete Hegses classified the company as a national security "supply chain risk", a rare qualification for a domestic company that has attracted widespread attention. Hegses wrote on the X platform: "In compliance with the President's directive to federal agencies to cease using Anthropic technology, I am now directing the Department of War to classify Anthropic as a national security supply chain risk. Effective immediately, all contractors, suppliers, and partners doing business with the US military are prohibited from engaging in any commercial activities with Anthropic. Anthropic will continue to provide services to the Department of War for a period not exceeding six months to ensure a smooth transition to better, more patriotic service providers." The turmoil originated from Anthropic's strong stance: the company refused to allow its AI to operate fully automatic weapons without human supervision and also refused to use it for large-scale domestic surveillance in the US. Anthropic's role in the "Epic Fury" operation It is understood that Anthropic was involved in the airstrikes targeting Iran in the "Epic Fury" operation last weekend. Seeking Alpha analyst Nova Capital said on Monday: "The US military was using Anthropic's models to attack Iran at the time. But in the current information confusion, the fact that may be overlooked is that whether it's Claude or other models that may be used, they cannot handle military sensitive data as independent tools. To make AI effective in completing such tasks, a complete ecosystem is needed. I think this is where Palantir's ontology comes into play... Without Palantir, Claude cannot operate. Palantir is called the 'battlefield brain'...I am sure that since the end of 2024, Claude has been used through Palantir's 'hosting' system." Seeking Alpha analyst Julia Ostian pointed out that removing Claude from the Palantir system would require a lot of effort, but this also opens the door for OpenAI and its major investor Microsoft Corporation (MSFT.US). After the Anthropic incident, OpenAI quickly reached an agreement with the US Department of War to deploy its models on government confidential networks. Ostian commented: "In my view, calling Anthropic a 'supply chain risk' is a strange move, as this usually applies to foreign companies suspected of espionage activities. For Palantir, this is a direct hit because they are the main channel for getting Anthropic's Claude into confidential networks. Now they have to readjust their way of working, likely turning to alternatives such as OpenAI or xAI." "Alphabet Inc. Class C (GOOGL.US) and Amazon.com, Inc. (AMZN.US) are also in a very difficult position, as investors and cloud service providers, they have invested billions of dollars in Anthropic. Now they have to find a way to divest these investments, or sever any ties with Anthropic to protect their government cloud contracts worth billions of dollars. However, for Microsoft Corporation, this is undoubtedly good news, as Azure and OpenAI have become almost the only choices for the Pentagon's transition phase." Anthropic refutes Hegses' remarks about business partners Despite Hegses' assertion that companies under contract with the military should not have any commercial cooperation with Anthropic, Anthropic clearly denies this claim. Anthropic stated in a statement: "Secretary Hegses implies that this qualification will restrict all entities doing business with the military from working with Anthropic. However, the Secretary does not have legal basis to support this statement. According to Title 10 of the US Code, 'supply chain risk' qualification only applies to the use of Claude under contracts with the Department of War, and does not affect contractors using Claude for other customers." This means: "If you are an individual user or have a commercial contract with Anthropic, your access to Claude through API, claude.ai, or other products will not be affected. If you are a contractor to the Department of War, this qualification (if formally enforced) only affects your use of Claude in Department of War contracts, without restrictions for other purposes." Wedbush expects that the dispute between Anthropic and the Pentagon will ultimately be resolved in court. Wedbush analyst Dan Ives stated in a report: "In the coming weeks or months, both parties will engage in a legal battle. We hope the dispute can be resolved quickly to eliminate uncertainty in the AI industry - some companies may suspend Claude deployments during the litigation. With its outstanding Claude AI technology, Anthropic has become a disruptor in the industry, and the outcome of this 'soap opera' (negotiation or litigation) will have a chain effect on its technology partners and customers." Seeking Alpha analyst Uttam Dey believes that Palantir can easily replace Anthropic with OpenAI models. Dey said: "From the dispute between the Department of War and Anthropic last week, it is clear that large language models are crucial for the Department of War, acting as a 'force multiplier' for its defense systems. Therefore, even though there are doubts about some of Anthropic's use cases in the Department of War, its contracts are easily replaceable - OpenAI has swiftly taken over." Dey also pointed out that Alphabet Inc. Class C's Gemini could be a viable alternative to Anthropic. He added: "This event will have no substantial impact on Palantir's business cooperation with the Department of War, as Palantir will continue as usual."