...the second AI industry jarring 'Blip 2.0' soap opera in 3 years.
Anthropic was forced to hit the brakes Friday night.
The childhood admonition based on fables, ‘be careful what you wish for’ has been a preached for centuries. It’s ironic to see it come true for one of the two leading US AI companies this AI Tech Wave in recent days.
That the world has been rushing to with tens of billions in global business.
I’m of course talkiing about Anthropic and its founder/CEO Dario Amodei recent essays, and the US government’s sudden red flag friday. It’s the Bigger Picture I’d like to address this Sunday. Let’s unpack.
It all transpired a bare few days after “Anthropic CEO says government should block dangerous AI”.
I had some thoughts and words on that over the last few days, especially around Mythos and Fable 5’s safety and promise nattatives..
Now, the US government did just do that in an unprecdented and jarring fashion.
Axios again summarized it well in “Trump admin blocks foreign access to Anthropic’s most powerful AI”:
“The Trump administration is blocking foreign governments, companies and individuals from accessing Anthropic’s most advanced AI models — leading the company to cut off all customer access altogether.”
“Why it matters: The move marks an escalation in Washington’s effort to treat cutting-edge AI systems as national security assets.”
“Anthropic now finds itself on a Pentagon blacklist deeming it too dangerous for the government’s own use, and in a Commerce Department licensing regime deeming it too dangerous for foreign use.”
It was dramatically initiated like a 3 year old AI incident that comes to mind.
On friday night, after SpaceX/xAI settled in after a successful ‘Goldilocks’ first day of its post-IPO trading.
“Driving the news: Commerce Secretary Howard Lutnick on Friday sent a letter to Anthropic CEO Dario Amodei saying that the Mythos 5 and Fable 5 models would be subject to export controls to any location outside of the U.S. and to all foreign persons within the country.”
“An administration official told Axios the Commerce Department decided to take the action after another company claimed it was able to jailbreak Mythos, alarming the administration about possible national security risks.”
“The administration tried to get Anthropic to pause releasing the latest models but was unsuccessful, the official said, prompting the export control letter.”
“The model needs to remain locked down until the U.S. government’s national security apparatus is hardened, the official said, adding that could happen in the next few weeks.”
The directives were sharp in their scope, trying to lock up Anthropic’s best and brightest efforts:
“Zoom in: Per Commerce’s letter, a license will be required for the export, re-export or domestic transfer of those Anthropic models.”
“Furthermore, Anthropic will have to submit an additional application for individually validated licenses.”
“Failure to comply would result in financial and civil penalties.”
Anthropic of course hit the ‘Kill Switch’ on the affected models immediately. Users ilke me saw it immediately in our workflows with Fable 5. With messages that curtly read “Claude Fable 5 is currently unavailable.”
“The other side: To ensure compliance, Anthropic said late Friday night it had to cut off access to Mythos and Fable for all customers.”
With words underlining their surprise and immediate reaction:
“We believe this is a misunderstanding and are working to restore access as soon as possible,” the company said in a post to X.”
The administration’s catalysts and motivations were not immediately clear around Mythos concerns:
“Context: The Trump administration earlier this month released an executive order to test the most advanced AI models before they are deployed.”
“Anthropic has a partnership with the Center for AI Standards and Innovation at Commerce for pre-deployment testing.”
“Yes, but: The executive order is voluntary and explicitly avoids a licensing regime — something White House chief AI adviser David Sacks was able to secure to avoid what he considers the “regulatory capture” of the biggest labs.”
“An administration official said that Trump “does not want to hurt the industry and wants innovation to continue.”
“The bottom line: Anthropic’s running fight with the government just got more complicated.”
Ironically, Anthropic’s longstanding investor and operational partner Amazon seems to be the one that flagged the jailbreak risk to the US government. With Amazon CEO Andy Jassy involved. The Amazon that recently also invested $10+ Billion and partnered with Anthropic sibling arch-rival company OpenAI recently. While both race towards their mega-AI IPOs this year.
And the European government is of course reacting to all this around the previously unthinkable “risks of depending on US for AI Tech”. So there’s that in the mix as well.
The suddenness of this action, and it’s potential impact on the whole AI industry are jarring indeed. As mentioned above, echoes of ‘The Blip’ three years ago when OpenAI’s non-profit board summarily fired founder/CEO Sam Altman. And then of course re-hired him after a tumultous weekend.
I expressed my reaction to this Humpty Dumpty suddenly falling off this wall, on x/twitter:
“Unintended Consquence of US Action if not modified/reversed: “
”A non-US lock down puts Anthropic and OpenAI IPOs on Hold for this year.
Massive impact on their financial growth. “
”Accelerates open source LLMs globally.”
”SpaceX/xAI and Elon get to be the one mega-AI IPO that got done in 2026.”
So there’s that aspect of the drama this ‘Blip 2.0’.
With the ‘AI Kill Switch’ in the hands of a particularly sensitive US government.
The Implicator provides more context in “Take the AI Kill Switch Away From the Politicians”:
““It’s a complete overreaction,” Katie Moussouris said of the order that pulled Anthropic’s two most capable AI models off the market on Friday. Moussouris, chief executive of the security firm Luta Security, had read the report the government acted on. Citing national security, the United States told Anthropic to cut off Fable 5 and Mythos 5 to every foreign national on earth, including the company’s own foreign-born engineers, and to comply the company shut the models off for everyone.”
“The triggering finding is narrow. A researcher prompted Fable to read a codebase and patch its software flaws, the daily work of the people who defend networks for a living. Moussouris told the Wall Street Journal that the model’s output would be of more use to defenders than to attackers, “exactly the kind of prompting that defenders would do.” Anthropic says rival public models, OpenAI’s GPT-5.5 among them, surface the same minor bugs with no jailbreak at all.”
“The quarrel behind the order is not new. The Pentagon branded Anthropic a supply-chain risk in March, advisers including David Sacks accused the company of “fear-mongering” and regulatory capture, and officials had pressed it to delay these very models. Commerce Secretary Howard Lutnick’s letter arrived on a Friday evening, days before an expected public offering that values Anthropic at $965 billion. Dean Ball, who advised the previous Trump White House on AI, called the order “baffling” and warned that “you should expect to have to prove your citizenship to use Anthropic models.”
The US Government also seems to be giving more voice and weight to the US Defense Department, which has had its own long-standing political beef with Anthropic. Designed for an audience of one in the White House. As the Implicator highlights:
“The Pentagon’s chief information officer, Kirsten Davies, gave her answer on X: “Some things are simply more important than revenue cycles, clickbait, and pre-IPO valuation. America First. Always.” That is a political standard, set by an antagonist in an ongoing fight.”
A better option for US long-term interests may be:
“A standing board would answer on different ground.”
“Seat AI researchers, security scientists, ethicists, and constitutional lawyers on it, wall it off from the administration of the day, and swear its members to the Constitution rather than to any Secretary. Give it the evidence in writing and let it rule in the open, on the technical record, with reasons a court could read. A body like that could still have pulled Fable, had the facts demanded it. The country would know why.”
“The government may take a tool away from the world. It should at least have to show its work.”
This is a fast moving set of circumstances, which should be addressable once egos and personalities cool.
And may see some meaningful ‘grown-up’ adjustments sooner than later.
But the Bigger Picture here is that ‘this is no way to run a railroad’ for the US Government and its leading businesses. To quote another old saying. Especially for a tech wave far bigger than the Railrod.
Where outsized personalities need to assess the true outsize risks vs the long-heralded outsized opportunities for all. And the US in particular.
Especially in alerting the world and its businesses to the downside of relying on US Tech. As they have done so to invest in the US without second thought for decades.
Right smack in the earliest days of this multi-trillion dollar, US led, global AI Tech Wave. With all its promise despite perceived perils ahead. Without a public presentation of the probabilities and potential impacts. Good and/or bad.
A whipsawing reality on the heels of the textbook launch of the first of three mega-AI IPOs for this year. And trillions of global investments leaning towards US Tech.
This AI railroad engine needs to be steered back on the track Especially as China races down its AI track. Stay tuned.
(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)