Anthropic’s AI models could potentially help spies analyze classified documents, but the company draws the line at domestic surveillance. That restriction is reportedly making the Trump administration angry.
On Tuesday, Semafor reported that Anthropic faces growing hostility from the Trump administration over the AI company’s restrictions on law enforcement uses of its Claude models. Two senior White House officials told the outlet that federal contractors working with agencies like the FBI and Secret Service have run into roadblocks when attempting to use Claude for surveillance tasks.
The friction stems from Anthropic’s usage policies that prohibit domestic surveillance applications. The officials, who spoke to Semafor anonymously, said they worry that Anthropic enforces its policies selectively based on politics and uses vague terminology that allows for a broad interpretation of its rules.
The restrictions affect private contractors working with law enforcement agencies who need AI models for their work. In some cases, Anthropic’s Claude models are the only AI systems cleared for top-secret security situations through Amazon Web Services’ GovCloud, according to the officials.
Anthropic offers a specific service for national security customers and made a deal with the federal government to provide its services to agencies for a nominal $1 fee. The company also works with the Department of Defense, though its policies still prohibit the use of its models for weapons development.
In August, OpenAI announced a competing agreement to supply more than 2 million federal executive branch workers with ChatGPT Enterprise access for $1 per agency for one year. The deal came one day after the General Services Administration signed a blanket agreement allowing OpenAI, Google, and Anthropic to supply tools to federal workers.
Microsoft’s Office 365 suite will soon incorporate AI models from Anthropic alongside existing OpenAI technology, The Information reported, ending years of exclusive reliance on OpenAI for generative AI features across Word, Excel, PowerPoint, and Outlook.
The shift reportedly follows internal testing that revealed Anthropic’s Claude Sonnet 4 model excels at specific Office tasks where OpenAI’s models fall short, particularly in visual design and spreadsheet automation, according to sources familiar with the project cited by The Information, who stressed the move is not a negotiating tactic.
Anthropic did not immediately respond to Ars Technica’s request for comment.
In an unusual arrangement showing the tangled alliances of the AI industry, Microsoft will reportedly purchase access to Anthropic’s models through Amazon Web Services—both a cloud computing rival and one of Anthropic’s major investors. The integration is expected to be announced within weeks, with subscription pricing for Office’s AI tools remaining unchanged, the report says.
Microsoft maintains that its OpenAI relationship remains intact. “As we’ve said, OpenAI will continue to be our partner on frontier models and we remain committed to our long-term partnership,” a Microsoft spokesperson told Reuters following the report. The tech giant has poured over $13 billion into OpenAI to date and is currently negotiating terms for continued access to OpenAI’s models amid ongoing negotiations about their partnership terms.
Stretching back to 2019, Microsoft’s tight partnership with OpenAI until recently gave the tech giant a head start in AI assistants based on language models, allowing for a rapid (though bumpy) deployment of OpenAI-technology-based features in Bing search and the rollout of Copilot assistants throughout its software ecosystem. It’s worth noting, however, that a recent report from the UK government found no clear productivity boost from using Copilot AI in daily work tasks among study participants.
After acquiring VMware, Broadcom swiftly enacted widespread changes that resulted in strong public backlash. A new survey of 300 director-level IT workers at companies that are customers of North American VMware provides insight into the customer reaction to Broadcom’s overhaul.
The survey released Thursday doesn’t provide feedback from every VMware customer, but it’s the first time we’ve seen responses from IT decision-makers working for companies paying for VMware products. It echos concerns expressed at the announcement of some of Broadcom’s more controversial changes to VMware, like the end of perpetual licenses and growing costs.
CloudBolt Software commissioned Wakefield Research, a market research agency, to run the study from May 9 through May 23. The “CloudBolt Industry Insights Reality Report: VMware Acquisition Aftermath” includes responses from workers at 150 companies with fewer than 1,000 workers and 150 companies with more than 1,000 workers. Survey respondents were invited via email and took the survey online, with the report authors writing that results are subject to sampling variation of ±5.7 percentage points at a 95 percent confidence level.
Notably, Amazon Web Services (AWS) commissioned the report in partnership with CloudBolt. AWS’s partnership with VMware hit a road bump last month when Broadcom stopped allowing AWS to resell the VMware Cloud on AWS offering—a move that AWS said “disappointed it.” Kyle Campos, CloudBolt CTPO, told Ars Technica that the full extent to which AWS was involved in this report was helping underwrite the cost of research. But you can see why AWS would have interest in customer dissatisfaction with VMware.
Widespread worry
Every person surveyed said that they expect VMware prices to rise under Broadcom. In a March “User Group Town Hall,” attendees complained about “price rises of 500 and 600 percent,” according to The Register. We heard in February from ServeTheHome that “smaller” cloud service providers were claiming to see costs grow tenfold. In this week’s survey, 73 percent of respondents said they expect VMware prices to more than double. Twelve percent of respondents expect a price hike of 301 to 500 percent. Only 1 percent anticipate price hikes of 501 to 1,000 percent.
“At this juncture post-acquisition, most larger enterprises seem to have a clear understanding of how their next procurement cycle with Broadcom will be impacted from a pricing and packaging standpoint,” the report noted.
Further, 95 percent of survey respondents said they view Broadcom buying VMware as disruptive to their IT strategy, with 46 percent considering it extremely or very disruptive.
Widespread concerns about cost and IT strategy help explain why 99 percent of the 300 respondents said they are concerned about Broadcom owning VMware, with 46 percent being “very concerned” and 30 percent “extremely concerned.”
Broadcom didn’t respond to Ars’ request for comment.
Not jumping ship yet
Despite widespread anxiety over Broadcom’s VMware, most of the respondents said they will likely stay with VMware either partially (43 percent of respondents) or fully (40 percent). A smaller percentage of respondents said they would move more workloads to the public cloud (38 percent) or a different hypervisor (34 percent) or move entirely to the public cloud (33 percent). This is with 69 percent of respondents having at least one contract expiring with VMware within the next 12 months.
Many companies have already migrated easy-to-move workloads to the public cloud, CloudBolt’s Campos said in a statement. For many firms surveyed, what’s left in the data center “is a mixture of workloads requiring significant modernization or compliance bound to the data center,” including infrastructure components that have been in place for decades. Campos noted that many mission-critical workloads remain in the data center, and moving them is “daunting with unclear ROI.”
“The emotional shock has started to metabolize inside of the Broadcom customer base, but it’s metabolized in the form of strong commitment to mitigating the negative impacts of the Broadcom VMware acquisition,” Campos told Ars Technica.
Resistance to ditching VMware reflects how “embedded” VMware is within customer infrastructures, the CloudBolt exec told Ars, adding:
In many cases, the teams responsible for purchasing, implementing, and operating VMware have never even considered an alternative prior to this acquisition; it’s the only operating reality they know and they are used to buying out of this problem.
Top reasons cited for considering abandoning VMware partially or totally were uncertainty about Broadcom’s plans, concerns about support quality under Broadcom, and changes to relationships with channel partners (each named by 36 percent of respondents).
Following closely was the shift to subscription licensing (34 percent), expected price bumps (33 percent), and personal negative experiences with Broadcom (33 percent). Broadcom’s history with big buys like Symantec and CA Technologies also has 32 percent of people surveyed considering leaving VMware.
Although many firms seem to be weighing their options before potentially leaving VMware, Campos warned that Broadcom could see backlash continue “for months and even years to come,” considering the areas of concern cited in the survey and how all VMware offerings are near-equal candidates for eventual nixing.
Enlarge/ An Amazon Web Services (AWS) data center under construction in Stone Ridge, Virginia, in March 2024. Amazon will spend more than $150 billion on data centers in the next 15 years.
The software project and company supporting it were fairly clear in why they did this. Redis CEO Rowan Trollope wrote on March 20 that while Redis and volunteers sponsored the bulk of the project’s code development, “the majority of Redis’ commercial sales are channeled through the largest cloud service providers, who commoditize Redis’ investments and its open source community.” Clarifying a bit, “cloud service providers hosting Redis offerings will no longer be permitted to use the source code of Redis free of charge.”
Clarifying even further: Amazon Web Services (and lesser cloud giants), you cannot continue reselling Redis as a service as part of your $90 billion business without some kind of licensed contribution back.
This generated a lot of discussion, blowback, and action. The biggest thing was a fork of the Redis project, Valkey, that is backed by The Linux Foundation and, critically, also Amazon Web Services, Google Cloud, Oracle, Ericsson, and Snap Inc. Valkey is “fully open source,” Linux Foundation execs note, with the kind of BSD-3-Clause license Redis sported until recently. You might note the exception of Microsoft from that list of fork fans.
As noted by Matt Asay, who formerly ran open source strategy and marketing at AWS, most developers are “largely immune to Redis’ license change.” Asay suggests that, aside from the individual contributions of AWS engineer and former Redis core contributor Madelyn Olson (who contributed in her free time) and Alibaba’s Zhao Zhao, “The companies jumping behind the fork of Redis have done almost nothing to get Redis to its current state.”
Olson told TechCrunch that she was disappointed by Redis’ license change but not surprised. “I’m more just disappointed than anything else.” David Nally, AWS’ current director for open source strategy and marketing, demurred when asked by TechCrunch if AWS considered buying a Redis license from Redis Inc. before forking. “[F]rom an open-source perspective, we’re now invested in ensuring the success of Valkey,” Nally said.
Shifts in open source licensing have triggered previous keep-it-open forks, including OpenSearch (from ElasticSearch) and OpenTofu (from Terraform). With the backing of the Linux Foundation and some core contributors, though, Valkey will likely soon evolve far beyond a drop-in Redis replacement, and Redis is likely to follow suit.
If you’re reading all this and you don’t own a gigascale cloud provider or sit on the board of a source code licensing foundation, it’s hard to know what to make of the fiasco. Every party in this situation is doing what is legally permissible, and software from both sides will continue to be available to the wider public. Taking your ball and heading home is a longstanding tradition when parties disagree on software goals and priorities. But it feels like there had to be another way this could have worked out.
