Anthropic said Thursday that “virtually no progress” had been made in the company’s talks with the Pentagon over the terms of use for its AI models ahead of a Friday afternoon deadline. The

AI safety and research company Anthropic has told the Pentagon it will not agree to their demands to drop critical safety precautions and grant the U.S. military full access to their AI capabilities.

The Defense Department has been feuding with Anthropic over military uses of its artificial intelligence tools. At stake are hundreds of millions of dollars in contracts and access to some of the most advanced AI on the planet.

The Pentagon previously requested Anthropic, OpenAI, Google, and xAI allow the use of their AI models for “all lawful purposes,” to which Anthropic put up the most resistance over fears its AI models could be used for autonomous weapons systems and mass domestic surveillance.

American AI company Anthropic has until 5:01 pm ET to give in to the Pentagon’s demands or face being labeled a “supply chain risk,” a type of designation usually reserved for companies thought to be extensions of foreign adversaries.

Nvidia CEO Jensen Huang weighed in on a conflict between the Defense Department and its strategic partner on Thursday, saying it's “not the end of the world.”

The technique exploits the web browsing and URL fetch capabilities of these platforms to create a bidirectional command and control channel that blends into routine AI traffic and requires neither an API key nor an authenticated account.

Anthropic, a company founded by OpenAI exiles worried about the dangers of AI, is loosening its core safety principle in response to competition.