Anthropic was the first major AI developer to handle classified information through a supply agreement routed through its cloud partner Amazon.

Several investors in artificial intelligence developer Anthropic are working to defuse a growing dispute between the company and the U.S. Department of Defense over limits on military uses of its technology, according to seven people familiar with the matter, amid concerns that an escalating conflict could damage the company’s business prospects.

Chief Executive Dario Amodei has discussed the issue in recent days with major investors and partners, including Amazon Chief Executive Andy Jassy, two of the people said. Venture capital firms Lightspeed and Iconiq have also contacted Anthropic executives about the situation, two sources added. Some investors have simultaneously reached out to contacts within the administration of U.S. President Donald Trump in an effort to reduce tensions between the company and the Pentagon.

The discussions are centered on preventing a potential government move to bar Pentagon contractors from using Anthropic’s artificial intelligence systems, the sources said. One person familiar with the situation said Anthropic and the Defense Department continue to hold discussions, though details of those talks were not clear.

The White House has publicly called on Anthropic to assist the government in phasing out its AI systems. Neither the Pentagon nor investors including Amazon responded to requests for comment.

The dispute follows months of disagreement between Anthropic and the Defense Department—renamed the Department of War by the Trump administration—over how the military may deploy the company’s technology in operational settings. The conflict has become a broader test of the degree of control AI developers can retain over the use of their systems once they are integrated into government and commercial applications.

Pentagon officials have urged AI companies to abandon internal usage restrictions and instead accept a contractual framework allowing any use that complies with U.S. law. Anthropic has refused to remove certain safeguards governing its flagship Claude AI models, maintaining prohibitions against the technology being used to operate autonomous weapons or to support large-scale domestic surveillance programs.

Anthropic was the first major AI developer to handle classified information through a supply agreement routed through its cloud partner Amazon. Last week, rival OpenAI said it had also reached a classified agreement with the Pentagon and added that Anthropic should not be treated as a security risk to the department.

During discussions with Anthropic leadership, investors have reaffirmed their support for the company while urging a negotiated solution with defense officials, the seven people familiar with the talks said. Some investors privately expressed frustration that Amodei’s approach had intensified tensions with the Pentagon rather than easing them.

One person briefed on the discussions described the situation as partly a diplomatic challenge. At the same time, investors acknowledge that Amodei faces internal constraints. Several people familiar with the matter said that if the company appeared to fully concede to administration demands, it could alienate employees and customers who have supported Anthropic partly because of its public stance on AI safety restrictions.

Amodei has not responded to requests for comment. In prior statements, he said the company could not “in good conscience accede” to government demands to remove its safeguards. According to one person who participated in a call with investors late Tuesday, Amodei said Anthropic would continue attempting to find a workable arrangement with the Department of War.

Investors are particularly focused on preventing Anthropic from being designated a “supply-chain risk” by the U.S. government. Such a designation could require federal contractors to discontinue use of the company’s technology, potentially affecting commercial customers that also conduct government work.

Defense Secretary Pete Hegseth has said that a supply-chain risk determination would compel all government contractors to stop using Anthropic’s systems across their operations. Anthropic has publicly challenged that interpretation, stating that Hegseth lacks the statutory authority to prohibit the use of its AI technology outside of direct defense contracts. The Pentagon has not responded to questions about that claim.

Anthropic said last week it would contest any supply-chain risk designation in court.

Even without a formal ban, some investors fear the confrontation could deter potential customers who prefer to avoid conflict with the administration, one person familiar with the matter said.

The dispute comes at a critical stage for the San Francisco-based startup. Anthropic has raised tens of billions of dollars from investors betting on rapid growth in enterprise adoption of its AI systems. The company has previously said enterprise customers account for roughly 80% of its revenue.

Demand for products including its Claude chatbot and the Claude Code programming assistant has expanded rapidly. On Monday, the Claude app ranked as the most downloaded free application in Apple’s App Store, surpassing OpenAI’s ChatGPT.

One person familiar with Anthropic’s finances said the company’s annualized revenue run rate has reached about $19 billion based on current sales, compared with roughly $14 billion only weeks earlier.

Investors say maintaining that growth trajectory is important for the company’s longer-term capital plans. Anthropic is currently allowing employees to sell shares to outside investors in secondary transactions, and the company has previously said no decision has been made regarding a potential initial public offering.

The investor push to calm tensions intensified after several U.S. government agencies began discontinuing Anthropic technology. Following an order issued by President Trump on Friday directing federal agencies to replace Anthropic systems within six months, the State Department switched to OpenAI’s products, according to people familiar with the change.

E-commerce giant aims to streamline operations, reduce bureaucracy, and boost AI-driven efficiency amid shifting tech landscape

Amazon is preparing to make one of its largest workforce reductions in years, with plans to eliminate as many as 30,000 corporate positions starting Tuesday, according to multiple sources familiar with the matter.

The cuts, representing nearly 10% of Amazon’s corporate workforce, mark another significant chapter in the company’s efforts to streamline operations and embrace artificial intelligence to enhance efficiency.

While the figure accounts for only a small fraction of Amazon’s total global headcount of 1.55 million employees, it would still be one of the largest corporate layoffs in the company’s history — second only to the 27,000 jobs eliminated during the 2022 restructuring.

The layoffs are expected to affect divisions across human resources, operations, devices, services, and Amazon Web Services (AWS), the company’s powerful cloud computing unit.

The restructuring, insiders say, is part of CEO Andy Jassy’s ongoing campaign to reduce bureaucracy and modernize management.

Jassy has been vocal about the need to make Amazon more agile, efficient, and responsive to technological changes, including the integration of AI to automate routine and repetitive corporate tasks.

Managers within impacted divisions reportedly underwent training on Monday to prepare for the process of notifying affected staff. According to those familiar with the matter, employees will begin receiving official layoff emails starting Tuesday morning.

Amazon declined to comment on the reported cuts, but industry analysts say the move underscores a broader trend in the technology sector — one where companies are increasingly relying on AI-powered productivity gains to manage costs and streamline workflows.

“This latest move signals that Amazon is likely realizing enough AI-driven productivity gains within corporate teams to support a substantial reduction in force,” said Sky Canaves, an analyst at eMarketer.

“The company is also under pressure to offset its massive investments in AI infrastructure in the short term.”

Jassy’s drive for reform is not new. Earlier this year, he implemented an internal feedback system allowing employees to anonymously flag inefficiencies within the organization.

The initiative resulted in over 1,500 employee submissions and led to 450 process changes. The goal, according to Jassy, is to eliminate unnecessary layers of management and speed up decision-making — a critical step as Amazon navigates a rapidly changing retail and tech environment.

The cuts also reflect Amazon’s evolving approach to post-pandemic workforce management. During the height of the COVID-19 crisis, the company hired aggressively to meet soaring e-commerce demand.

However, with consumer habits normalizing and economic pressures mounting, Amazon has been reassessing its corporate structure to better align with future growth goals.

Adding to the internal strain is the company’s strict return-to-office policy, requiring employees to be on-site five days a week — one of the toughest mandates in the tech industry.

Sources indicate that the policy has not achieved the attrition Amazon had hoped for. Some employees who have failed to comply are reportedly being treated as having voluntarily resigned, allowing Amazon to reduce costs without paying severance packages.

The planned cuts come as Amazon continues to rely heavily on its cloud business, AWS, which remains the company’s most profitable segment.

However, AWS has faced slowing growth amid fierce competition from Microsoft Azure and Google Cloud. Amazon’s cloud revenue grew 17.5% in the second quarter, lagging behind Azure’s 39% and Google Cloud’s 32%.

Analysts expect AWS’s third-quarter growth to slow slightly to around 18%.

Despite the restructuring, Amazon remains optimistic about the upcoming holiday season. The company announced plans to hire 250,000 seasonal workers to handle surging online orders — consistent with previous years.

This seasonal hiring drive is expected to help balance the workforce reductions occurring in its corporate divisions.

Meanwhile, Amazon has also begun reorganizing parts of its People Experience and Technology (PXT) division, particularly its diversity initiatives.

An internal memo reviewed by reporters showed that several employees in this unit have been promoted or reassigned to new roles, signaling the company’s commitment to evolving its human resources strategies even amid widespread job cuts.

According to Layoffs.fyi, a website tracking tech industry job losses, nearly 98,000 tech employees have been laid off across 216 companies in 2025 alone.

This figure follows a total of 153,000 cuts in 2024, showing that downsizing remains a dominant trend as the tech sector adjusts to economic shifts and AI adoption.

Amazon’s stock responded modestly to the reports, rising 1.2% to $226.97 on Monday. Investors appear to view the move as a sign of financial discipline and forward-looking adaptation to technological realities.

The company is scheduled to release its third-quarter earnings report on Thursday, which may shed more light on the financial rationale behind these cuts and the expected impact of AI integration across its operations.

As Amazon moves into another transformative phase, the message from leadership is clear: automation and efficiency are the new priorities.

The challenge will be maintaining innovation and morale amid deep structural change — a balance that could define the company’s next decade.