Pentagon move against Anthropic creates openings for small AI defense startups

The deterioration of relations between the Pentagon and Anthropic, once a premier artificial intelligence provider, has spurred a surge in demand for small-scale defense startups among generals, combatant commanders, and wealthy investors.

The US military’s requirement to expand and diversify its pool of AI providers has acquired a more strategic dimension following the sidelining of Anthropic.

In the weeks following the public emergence of friction between the Department of War and Anthropic, and the company’s subsequent exclusion from military channels, defense-focused startups such as Smack Technologies and EdgeRunner AI reported a level of interest that would have been unimaginable months ago.

These firms observed a significant increase in potential contracts, meeting requests, and approaches from investors who had previously shown no interest.

The Pentagon’s increasing distance from its primary AI provider has created opportunities for smaller rivals seeking to collaborate with the world’s most lucrative government contractor. Securing a defense contract not only opens doors to further business opportunities with other US government branches but also serves as a critical signal of trust and security for potential commercial clients.

Tyler Sweatt, CEO of Second Front—a company that assists technology firms in meeting the requirements for operating on secure Pentagon networks—told Reuters that they have seen a massive spike in demand for AI solutions from both customers and the government since Anthropic was declared a “supply chain risk.”

Sweatt noted that clients have approached them in response to the Pentagon’s shift, as the department seeks rapid deployment following the Anthropic crisis.

Since the Pentagon labeled Anthropic products a “supply chain risk” in March and the parties became embroiled in litigation, the military has intensified its interest in AI startups like Smack Technologies.

Andrew Markoff, co-founder and CEO of the California-based startup which employs 19 people, said the military had told the firm, “We want more, we want demos, let’s talk about how we can move faster.” In late March, a judge temporarily halted the Pentagon’s decision to blacklist Anthropic.

Tyler Saltsman, co-founder and CEO of EdgeRunner AI, described a similar trajectory. Saltsman reported that while his company had waited more than a year for a Space Force contract to clear the Pentagon’s procurement mechanism, the deal was signed within weeks of the Anthropic case erupting.

“I can’t prove that the Anthropic drama accelerated the process, but I have a strong suspicion,” Saltsman stated.

A Pentagon official said the Department of War will continue to rapidly deliver leading-edge AI capabilities to warfighters at all classification levels through strong industry partnerships.

Separately, a Pentagon technology expert previously told Reuters that the rupture with Anthropic and the realization of the military’s over-reliance on a single provider forced the institution to diversify its suppliers.

Smack’s Marine Corps contract gains momentum

The most concrete example of the post-Anthropic era for Smack Technologies was seen in its project with the Marine Corps. The company won a contract with the Marine Corps in March 2025 and delivered a successful prototype by October. The software in question reduces operational planning processes, which normally take months, to approximately 15 minutes.

Despite the successful prototype, the process had slowed at one point; the full production plan was budgeted for fiscal year 2027, meaning October 2027 at the earliest. No clear direction for the project had been established through the end of 2025 and into early 2026.

However, following the Anthropic crisis, Smack was invited within weeks to numerous meetings organized by the Marine Corps focusing on “how quickly production could be reached this year.”

Markoff stated that “very specific guidance, mobility, and energy” had emerged toward making the prototype ready for combat operations in 2026, representing an acceleration of more than a year in the process.

This shift was not limited to the Marine Corps. Smack, which also holds contracts with the Navy and Air Force, reportedly received almost immediate interest from US Special Operations Command and other units.

EdgeRunner, which is deployed with Army Special Forces groups and holds a contract with the Space Force, also reported that its engagements with the Navy had accelerated dramatically. Meetings that were previously held bi-weekly or monthly are now taking place several times a week.

Both EdgeRunner and Smack are now racing to operate their systems at higher security classification levels. This level serves as the gateway to the most operationally critical use cases and the largest military contracts.

EdgeRunner officials said the military informed them they could achieve IL-6 security authorization—granting access to secret and top-secret data—within three months.

Saltsman described the timeline as “extraordinary” for a process that normally takes 18 months or longer. According to Saltsman, this acceleration stems partly from pressure from Pentagon leadership to bypass procurement bureaucracy and partly from the urgency the Anthropic situation added to the institution’s AI strategy.