The decision comes ahead of a Friday deadline to reach an agreement or face tough government measures.

They announced it cannot agree to the Pentagon's demand to use its tool for mass domestic surveillance and autonomous weapons.

The Pentagon's top technology official told CBS News the military has offered compromises to Anthropic, amid a feud over whether its powerful AI technology will be restricted — but Anthropic called the offer inadequate.

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.

The Pentagon is threatening to use the Defense Production Act (DPA) against Anthropic amid a dispute over the company’s restrictions on its AI tools, in a move that many experts say is an unusual use

Defense Secretary Pete Hegseth gave Anthropic until Friday at 5 p.m. to grant the military unresticted use of its AI technology.

Anthropic CEO Dario Amodei said Thursday the AI company “cannot in good conscience accede” to the Pentagon’s demands to allow wider use of its technology.

CEO Dario Amodei’s statement came less than 24 hours before the deadline in the Pentagon’s ultimatum. Less than 24 hours before the deadline in an ultimatum issued by the Pentagon, Anthropic has refused the Department of Defense’s demands for unrestricted access to its AI.