Small defense industry artificial intelligence firms are now able to find new opportunities with the military after the breakdown of relations between the Department of Defense (DoD) and AI firm Anthropic. The Pentagon had blacklisted Anthropic following the company’s refusal to allow the military to use AI chatbot Claude for U.S. surveillance or autonomous weapons.
While this blocked the company from certain contracts, Anthropic got a reprieve from a federal court. A federal judge blocked the blacklisting, nevertheless, the souring of relations has been seen as an opportunity for other AI companies.
Defense-focused AI companies like Smack Technologies and EdgeRunner AI say they have experienced a shift in interest that would have been unimaginable just months ago. They have received a surge of overtures about possible contracts and meeting requests and been approached by investors who previously showed no interest.
READ: Pentagon clashes with Anthropic over military AI use safeguards (January 30, 2026)
“We’ve seen a massive increase in demand from customers and the government to get AI solutions fielded since Anthropic was declared a supply-chain risk,” said Tyler Sweatt, CEO of Second Front, a company that helps technology firms meet the requirements needed to operate on secure Pentagon networks. “Our customers are turning to us as the Pentagon turns to them to deploy quickly in the wake of the Anthropic blowup.”
Andrew Markoff, co-founder and chief executive of the 19-person startup based in El Segundo, California, said that ever since Anthropic was designated a “supply chain risk” by the Pentagon in March, and the two sides became embroiled in a lawsuit, the military has expressed increasing interest in AI startups like Smack Technologies, saying, “We want more, we want demos, let’s talk about how we can move faster.”
READ: US judge gives Anthropic reprieve from Pentagon blacklisting (March 27, 2026)
Tyler Saltsman, co-founder and chief executive of EdgeRunner AI, described a similar experience. His company had been waiting more than a year for a Space Force contract to clear the Pentagon’s procurement machinery, and it was signed within weeks after the Anthropic situation.
“I can’t prove that the Anthropic drama sped this up,” Saltsman said, “but I have a sneaky suspicion it did.”
“The Pentagon will continue to rapidly deploy frontier AI capabilities to the warfighter through strong industry partnerships across all classification levels,” a Pentagon official said.
A Pentagon technologist previously told Reuters that the falling-out with Anthropic, and the realization that the Defense Department was heavily dependent on one AI provider, forced the department to diversify AI providers.