U.S. government agencies are cutting ties with artificial intelligence (AI) chatbot developer Anthropic and rapidly switching to its competitor, OpenAI’s ChatGPT.
Reuters reported on Monday, citing internal State Department documents, that the AI model powering the department’s in-house chatbot, StateChat, is being replaced from Anthropic’s Claude to OpenAI’s GPT-4.1.
American diplomats had been using StateChat to translate and summarize diplomatic documents.
This change follows President Donald Trump’s February 27 directive ordering all federal agencies to immediately stop using Anthropic’s technology.
Other departments besides the State Department are also swiftly ending their relationships with Anthropic.
Treasury Secretary Scott Bessent officially announced via X (formerly Twitter) that the Treasury Department will terminate the use of all Anthropic products, including Claude, in compliance with the president’s order.
William Pulte, Director of the Federal Housing Finance Agency, also stated that his agency and its affiliated mortgage companies will cease using Anthropic products.
The controversy stemmed from a dispute between Anthropic and the Department of Defense. Anthropic insisted on two safety provisions in their contract: their AI should not be used for mass surveillance of U.S. citizens or for developing fully autonomous lethal weapons without human oversight.
However, the Defense Department argued that it should have the freedom to use AI for all lawful purposes, leading to a breakdown in negotiations.
In response, President Trump branded Anthropic as a radical left-wing woke company and ordered a complete termination of the contract.
Defense Secretary Pete Hegseth went further, indicating he would designate Anthropic as a supply chain risk – a label typically reserved for companies from hostile nations, marking an unprecedented move against a U.S. firm.
As Anthropic faces expulsion from government agencies, its rival OpenAI is capitalizing on the situation. OpenAI Chief Executive Officer (CEO) Sam Altman announced that the company has secured a new contract related to the Defense Department’s classified network.