Anthropic insists its technology should not be used for the mass surveillance of US citizens or deployed in fully autonomous weapons systems, while the Pentagon says it operates within the law and that contracted suppliers cannot set terms on how their products are employed.

"I am directing EVERY Federal Agency in the United States Government to IMMEDIATELY CEASE all use of Anthropic's technology. We don't need it, we don't want it, and will not do business with them again!" Trump said in a post on his Truth Social platform.

"There will be a Six Month phase out period for Agencies like the Department of War who are using Anthropic's products, at various levels," the US president said, referring to the Department of Defense.

Anthropic did not immediately reply to a request for comment on Trump's announcement.

The Pentagon had said Anthropic must agree to comply with its demand by 5:01 pm (22:01 GMT) Friday or face compulsion under the Defense Production Act.

The Cold War-era law, last invoked during the Covid pandemic, grants the federal government sweeping powers to direct private industry toward national security priorities.

The Pentagon also threatened to designate Anthropic a supply chain risk -- a label typically reserved for companies from adversary nations -- which could severely damage its ability to work with the US government and harm its broader reputation.

But Anthropic refused, with its chief executive Dario Amodei saying Thursday that "these threats do not change our position: we cannot in good conscience accede to their request."