The Department of War gave Anthropic until 5:01pm on Friday the 27th to either give the Pentagon ‘unfettered access’ to Claude for ‘all lawful uses,’ or else. With the ‘or else’ being not the sensible ‘okay we will cancel the contract then’ but also expanding to either being designated a supply chain risk or having the government invoke the Defense Production Act.

It is perfectly legitimate for the Department of War to decide that it does not wish to continue on Anthropic's terms, and that it will terminate the contract. There is no reason things need be taken further than that.

Undersecretary of State Jeremy Lewin: This isn’t about Anthropic or the specific conditions at issue. It's about the broader premise that technology deeply embedded in our military must be under the exclusive control of our duly elected/appointed leaders. No private company can dictate normative terms of use—which can change and are subject to interpretation—for our most sensitive national security systems. The @DeptofWar obviously can’t trust a system a private company can switch off at any moment.

Timothy B. Lee: OK, so don’t renew their contract. Why are you threatening to go nuclear by declaring them [...]

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Outline:

(08:00) Good News: We Can Keep Talking

(10:31) Once Again No You Do Not Need To Call Dario For Permission

(15:22) The Pentagon Reiterates Its Demands And Threats

(16:48) The Pentagons Dual Threats Are Contradictory and Incoherent

(18:27) The Pentagons Position Has Unfortunate Implications

(20:25) OpenAI Stands With Anthropic

(22:48) xAI Stands On Unreliable Ground

(25:25) Replacing Anthropic Would At Least Take Months

(26:02) We Will Not Be Divided

(27:50) This Risks Driving Other Companies Away

(30:32) Other Reasons For Concern

(32:10) Wisdom From A Retired General

(35:06) Congress Urges Restraint

(37:05) Reaction Is Overwhelmingly With Anthropic On This

(40:52) Some Even More Highly Unhelpful Rhetoric

(47:23) Other Summaries and Notes

(48:32) Paths Forward

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Events continue to be fast and furious.

This was the first actually stressful week of the year.

That was mostly due to issues around Anthropic and the Department of War. This is the big event the news is not picking up, with the Pentagon on the verge of invoking one of two extreme options that would both be extremely damaging to national security and that would potentially endanger our Republic. The post has details, and the first section here has a few additional notes.

Also stressful for many was the impact of Citrini's AI scenario, where it is 2028 and AI agents are sufficiently capable to disrupt the whole economy but this turns out to be bearish for stocks. People freaked out enough about this that it seems to have directly impacted the stock market, although most stocks other than the credit card companies seem to have bounced back. Of course, in a scenario like that we probably all die and definitely the world transforms, and you have bigger things to worry about than the stock market, but the post does raise a lot of very good detailed points, so I spend my post going over [...]

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Outline:

(02:34) Anthropic and the Department of War

(06:06) Language Models Offer Mundane Utility

(06:39) Language Models Dont Offer Mundane Utility

(08:23) Huh, Upgrades

(08:43) On Your Marks

(15:22) Choose Your Fighter

(15:32) Deepfaketown and Botpocalypse Soon

(16:58) Head In The Sand

(17:58) Fun With Media Generation

(19:19) A Young Ladys Illustrated Primer

(19:46) You Drive Me Crazy

(20:43) They Took Our Jobs

(25:42) The Art of the Jailbreak

(26:43) Get Involved

(28:02) Introducing

(31:49) In Other AI News

(36:10) The India Summit

(46:01) Show Me the Money

(48:07) Quiet Speculations

(49:25) The Quest for Sane Regulations

(54:59) Chip City

(56:11) The Mask Comes Off

(58:19) The Week in Audio

(01:07:27) Quickly, Theres No Time

(01:07:59) Dean Ball On Recursive Self-Improvement

(01:13:28) Rhetorical Innovation

(01:18:23) Aligning a Smarter Than Human Intelligence is Difficult

(01:20:23) The Homework Assignment Is To Choose The Assignment

(01:35:34) Agent Foundations

(01:36:54) Autonomous Killer Robots

(01:37:36) People Really Hate AI

(01:39:50) People Are Worried About AI Killing Everyone

(01:42:00) Other People Are Not As Worried About AI Killing Everyone

(01:42:59) The Lighter Side

(01:47:24) If I streamed Slay the Spire 2, would you watch?

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The situation in AI in 2026 is crazy. The confrontation between Anthropic and Secretary of War Pete Hegseth is a new level of crazy. It risks turning quite bad for all. There's also nothing stopped it from turning out fine for everyone.

By at least one report the recent meeting between the two parties was cordial and all business, but Anthropic has been given a deadline of 5pm eastern on Friday to modify its existing agreed-upon contract to grant ‘unfettered access’ to Claude, or else.

Anthropic has been the most enthusiastic supporter our military has in AI and in tech, but on this point have strongly signaled they with this they cannot comply. Prediction markets find it highly unlikely Anthropic will comply (14%), and think it is highly possible Anthropic will either be declared a Supply Chain Risk (16%) or be subjected to the Defense Production Act (23%).

I’ve hesitated to write about this because I could make the situation worse. There's already been too many instances in AI of warnings leading directly to the thing someone is warning about, by making people aware of that possibility, increasing its salience or creating negative polarization and solidifying [...]

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Outline:

(01:32) This Standoff Should Never Have Happened

(06:07) Anthropic Cannot Fold

(07:12) Dean Ball Gives a Primer

(10:57) What Happened To Lead To This Showdown?

(18:05) Simple Solution: Delayed Contract Termination

(18:59) Better Solution: Status Quo

(19:29) Extreme Option One: Supply Chain Risk

(25:56) Putting Some Misconceptions To Bed

(28:16) Extreme Option Two: The Defense Production Act

(41:23) These Two Threats Contradict Each Other

(42:40) The Pentagons Actions Here Are Deeply Unpopular

(45:45) The Pentagons Most Extreme Potential Asks Could End The Republic

(48:07) Anthropic Did Make Some Political Mistakes

(49:13) Claude Is The Best Model Available

(50:55) The Administration Until Now Has Been Strong On This

(51:50) You Should See The Other Guys

(53:16) Some Other Intuition Pumps That Might Be Helpful

(53:55) Trying To Get An AI That Obeys All Orders Risks Emergent Misalignment

(01:00:13) We Can All Still Win

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A viral essay from Citrini about how AI bullishness could be bearish was impactful enough for Bloomberg to give it partial responsibility for a decline in the stock market, and all the cool economics types are talking about it.

So fine, let's talk.

It's an excellent work of speculative fiction, in that it:

Citrini: Hopefully, reading this leaves you more prepared for potential left tail risks as AI makes the economy increasingly weird.

It is still a work of speculative fiction. It doesn’t let reality get in the way of its ideas.

I appreciate Tor Bair's perspective of this being a case of Cunningham's Law, that the best [...]

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Outline:

(03:17) The Headline Destination

(05:36) ...And Thats Terrible

(08:59) SaaSpocalype Now

(09:48) Levels of Friction Go To Zero ...And Thats Terrible

(11:51) DoorDash and Uber

(13:36) Breaking Into The Marketplace

(14:24) Who Captures The Surplus?

(15:09) For Everything Else

(20:55) Real Estate Realism

(23:14) Everything Is Awesome And No One Is Happy

(23:49) Bearish For Non-AI Stocks Is Reasonable

(25:47) Other Levels of Friction Problems

(26:45) Oh Over There? Thats The Singularity

(28:12) Have I Got A Job For You

(29:51) Systemic Failure

(32:31) What Me Worry (About Economics)?

(37:14) We The People

(39:29) The Efficient Market Hypothesis Is False

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Anthropic first gave us Claude Opus 4.6, then followed up with Claude Sonnet 4.6.

For most purposes Sonnet 4.6 is not as capable as Opus 4.6, but it is not that far behind, it would have been fully frontier-level a few months ago, and it is faster and cheaper than Opus.

That has its advantages, including that Sonnet is in the free plan, and it seems outright superior for computer use.

Anthropic: Claude Sonnet 4.6 is available now on all plans, Cowork, Claude Code, our API, and all major cloud platforms.

We’ve also upgraded our free tier to Sonnet 4.6 by default—it now includes file creation, connectors, skills, and compaction.

Claude Sonnet 4.6 is our most capable Sonnet model yet. It's a full upgrade of the model's skills across coding, computer use, long-context reasoning, agent planning, knowledge work, and design. Sonnet 4.6 also features a 1M token context window in beta.

JB: I use it all the time because I’m poor.

This substantially upgrades Claude's free tier for coding and computer use. It gives us all a better lightweight option, including for sub-agents where you would have previously needed to use Haiku. [...]

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Outline:

(01:53) On Your Marks

(10:09) Reactions: Its How Much You Save

(18:56) Bringing It Together

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This was the week of Claude Opus 4.6, and also of ChatGPT-5.3-Codex. Both leading models got substantial upgrades, although OpenAI's is confined to Codex. Once again, the frontier of AI got more advanced, especially for agentic coding but also for everything else.

I spent the week so far covering Opus, with two posts devoted to the extensive model card, and then one giving benchmarks, reactions, capabilities and a synthesis, which functions as the central review.

We also got GLM-5, Seedance 2.0, Claude fast mode, an app for Codex and much more.

Claude fast mode means you can pay a premium to get faster replies from Opus 4.6. It's very much not cheap, but it can be worth every penny. More on that in the next agentic coding update.

One of the most frustrating things about AI is the constant goalpost moving, both in terms of capability and safety. People say ‘oh [X] would be a huge deal but is a crazy sci-fi concept’ or ‘[Y] will never happen’ or ‘surely we would not be so stupid as to [Z]’ and then [X], [Y] and [Z] all happen and everyone shrugs as if nothing happened and [...]

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Outline:

(02:32) Language Models Offer Mundane Utility

(03:17) Language Models Dont Offer Mundane Utility

(03:33) Huh, Upgrades

(04:22) On Your Marks

(06:23) Overcoming Bias

(07:20) Choose Your Fighter

(08:44) Get My Agent On The Line

(12:03) AI Conversations Are Not Privileged

(12:54) Fun With Media Generation

(13:59) The Superb Owl

(22:07) A Word From The Torment Nexus

(26:33) They Took Our Jobs

(35:36) The Art of the Jailbreak

(35:48) Introducing

(37:28) In Other AI News

(42:01) Show Me the Money

(43:05) Bubble, Bubble, Toil and Trouble

(53:38) Future Shock

(56:06) Memory Lane

(57:09) Keep The Mask On Or Youre Fired

(58:35) Quiet Speculations

(01:03:42) The Quest for Sane Regulations

(01:06:09) Chip City

(01:09:46) The Week in Audio

(01:10:06) Constitutional Conversation

(01:11:00) Rhetorical Innovation

(01:19:26) Working On It Anyway

(01:22:17) The Thin Red Line

(01:23:35) Aligning a Smarter Than Human Intelligence is Difficult

(01:30:42) People Will Hand Over Power To The AIs

(01:31:50) People Are Worried About AI Killing Everyone

(01:32:40) Famous Last Words

(01:40:15) Other People Are Not As Worried About AI Killing Everyone

(01:42:41) The Lighter Side

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Things that are being pushed into the future right now:

We are officially a bit behind and will have to catch up next week.

Even without all that, we have a second highly full plate today.

Table of Contents

(As a reminder: bold are my top picks, italics means highly skippable)

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Outline:

(00:43) Levels of Friction

(04:55) The Art Of The Jailbreak

(06:16) The Quest for Sane Regulations

(12:09) People Really Hate AI

(18:22) A Very Bad Paper

(25:21) Rhetorical Innovation

(32:35) The Most Forbidden Technique

(34:10) Everyone Is Or Should Be Confused About Morality

(36:07) Aligning a Smarter Than Human Intelligence is Difficult

(44:51) Well Just Call It Something Else

(47:18) Vulnerable World Hypothesis

(51:37) Autonomous Killer Robots

(53:18) People Will Hand Over Power To The AIs

(57:04) People Are Worried About AI Killing Everyone

(59:29) Other People Are Not Worried About AI Killing Everyone

(01:00:56) The Lighter Side

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There was way too much going on this week to not split, so here we are. This first half contains all the usual first-half items, with a focus on projections of jobs and economic impacts and also timelines to the world being transformed with the associated risks of everyone dying.

Quite a lot of Number Go Up, including Number Go Up A Lot Really Fast.

Among the thing that this does not cover, that were important this week, we have the release of Claude Sonnet 4.6 (which is a big step over 4.5 at least for coding, but is clearly still behind Opus), Gemini DeepThink V2 (so I could have time to review the safety info), release of the inevitable Grok 4.20 (it's not what you think), as well as much rhetoric on several fronts and some new papers. Coverage of Claude Code and Cowork, OpenAI's Codex and other things AI agents continues to be a distinct series, which I’ll continue when I have an open slot.

Most important was the unfortunate dispute between the Pentagon and Anthropic. The Pentagon's official position is they want sign-off from Anthropic and other AI companies on ‘all legal uses’ [...]

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Outline:

(02:26) Language Models Offer Mundane Utility

(02:49) Language Models Dont Offer Mundane Utility

(06:11) Terms of Service

(06:54) On Your Marks

(07:50) Choose Your Fighter

(09:19) Fun With Media Generation

(12:29) Lyria

(14:13) Superb Owl

(14:54) A Young Ladys Illustrated Primer

(15:03) Deepfaketown And Botpocalypse Soon

(17:49) You Drive Me Crazy

(18:04) Open Weight Models Are Unsafe And Nothing Can Fix This

(21:19) They Took Our Jobs

(26:53) They Kept Our Agents

(27:42) The First Thing We Let AI Do

(37:47) Legally Claude

(40:24) Predictions Are Hard, Especially About The Future, But Not Impossible

(46:08) Many Worlds

(48:45) Bubble, Bubble, Toil and Trouble

(49:31) A Bold Prediction

(49:55) Brave New World

(53:09) Augmented Reality

(55:21) Quickly, Theres No Time

(58:29) If Anyone Builds It, We Can Avoid Building The Other It And Not Die

(01:00:18) In Other AI News

(01:04:03) Introducing

(01:04:31) Get Involved

(01:07:15) Show Me the Money

(01:08:26) The Week In Audio

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There really is a lot going on these days.

I held off posting this because I was trying to see if I could write a net helpful post about the current situation involving Anthropic and the Pentagon. Anthropic very much wants to help DoW defend our country and make us strong. It is clear there have been some large misunderstandings here about how LLMs work.

They are not ordinary tools like spreadsheets that automatically do whatever the user asks, nor would it be safe to make them so, nor do they predictably adhere to written rule sets or take instructions from their CEO in a crisis. And they are probabilistic. You do not and cannot get absolute guarantees.

The only way to know if an AI model will do what you need in a crisis is something you needed to be do regardless of potential refusals, and which is also what you must do with human soldiers, which is to run the simulations and mock battles and drills and tests that tell you if the model can do and is willing to do the job.

If there are irreconcilable differences and the military contract needs [...]

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Outline:

(02:09) Bad News

(04:03) Government Working

(15:11) The Epstein Files

(17:17) RIP Scott Adams

(19:08) News You Cant Use But Click On Anyway

(20:22) Were Putting Together A Team

(20:47) You Cant Retire, I Quit

(23:41) Jones Act Watch

(33:24) Variously Effective Altruism

(34:41) They Took Our Jobs And Now I Can Relax

(35:39) While I Cannot Condone This

(37:32) Good News, Everyone

(39:19) Use Your One Time

(42:34) Hands Off My Phone

(45:14) Fun Theory

(46:46) Good Advice

(48:31) For Your Entertainment

(51:07) Plur1bus

(52:14) Gamers Gonna Game Game Game Game Game

(57:58) Sports Go Sports

(01:02:49) The Revolution of Retroactive Rising Expectations

(01:04:15) I Was Promised Spying Cars

(01:05:13) Prediction Market Madness

(01:09:02) The Lighter Side

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Some podcasts are self-recommending on the ‘yep, I’m going to be breaking this one down’ level. This was one of those. So here we go.

As usual for podcast posts, the baseline bullet points describe key points made, and then the nested statements are my commentary. Some points are dropped.

If I am quoting directly I use quote marks, otherwise assume paraphrases.

Normally I keep everything to numbered lists, but in several cases here it was more of a ‘he didn’t just say what I think he did did he’ and I needed extensive quotes.

In addition to the podcast, there were some discussions around safety, or the lack thereof, at xAI, and Elon Musk went on what one can only describe as megatilt, including going hard after Anthropic's Amanda Askell. I will include that as a postscript.

I will not include recent developments regarding Twitter, since that didn’t come up in the interview.

I lead with a discussion of bounded distrust and how to epistemically consider Elon Musk, since that will be important throughout including in the postscript.

What are the key takeaways?

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Outline:

(02:56) Bounded Distrust

(05:12) IN SPACE

(09:56) The AI Will Follow You To Mars

(22:32) xAI Business Plans

(25:54) Optimus Prime

(27:04) Beating China

(30:02) SpaceX and How To Run a Company Elon Style

(33:17) DOGE

(35:29) TeraFab IN SPACE

(35:47) Postscript: Safety Third at xAI

(40:15) Elon Serves Back Saying That Which Is Not

(42:51) Elons Army

(43:55) Children Are Our Future

(48:11) Where Do We Go From Here

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