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Anthropic doesn't trust the Pentagon, and neither should you - Decoder with Nilay Patel | Wave AI Podcast Notes

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Anthropic doesn't trust the Pentagon, and neither should you

Decoder with Nilay Patel

Thu Mar 12 2026

Techdirt’s Mike Masnick on the NSA, surveillance, and why we can’t take the government at its word.

Summary

Decoder with Nilay Patel – Episode Summary

Episode: Anthropic doesn’t trust the Pentagon, and neither should you

Date: March 12, 2026
Host: Nilay Patel (Editor-in-Chief, The Verge)
Guest: Mike Masnick (Founder & CEO, TechDirt)

Episode Overview

This episode dives into the rapidly escalating legal and ethical standoff between artificial intelligence company Anthropic and the U.S. Department of Defense, focusing especially on questions of AI-enabled government surveillance. Nilay Patel and Mike Masnick use Anthropic’s legal challenge as an entry point to unpack the historical, legal, and cultural roots of mass surveillance in America—exploring why neither Anthropic nor the average citizen should easily trust government interpretations of surveillance law, especially as AI technologies raise the stakes and the scale.

Key Discussion Points & Insights

1. Setting the Stage: Anthropic vs. the Pentagon

Background: Anthropic, best known for its Claude AI, is suing the Pentagon after being labeled a "supply chain risk," claiming violations of its First and Fifth Amendment rights ([01:28–04:33]).
Two Red Lines:
- Autonomous weapons: Set aside for this episode.
- Mass surveillance: The primary focus, highlighting the potential of AI tools to enable unprecedented government spying ([05:03–05:43]).

2. How U.S. Surveillance Laws Grew and Shifted

Post-9/11 Landscape:
- Patriot Act expanded surveillance powers, later interpreted more broadly.
- FISA courts are secretive and one-sided: "Only one side gets to plead their case… It’s all done in secret." (Masnick, [06:38]).
- Executive Order 12333 (Reagan era) set rules for intelligence collection but was later re-interpreted ([06:38–12:18]).
Key Insight:
- The NSA invents new meanings for ordinary words (like "target") to justify broad surveillance: "…the NSA has its own dictionary that is somewhat different than the dictionary you and I use…" (Masnick, [09:44]).
- Even U.S. citizens’ data may be swept in through foreign contact, secret FISA proceedings, or by data traversing international cables.

3. Partisan Continuity in Expanding the Surveillance State

Both Republican and Democratic administrations incrementally broadened surveillance powers for fear of terrorist attacks and political blowback.
- "Nobody, and certainly no president, wants to be president during the time when there’s a big terrorist attack because that makes them look bad." (Masnick, [12:50]).
Clever government lawyers systematically "bend" the law or reinterpret statutes to keep surveillance efforts out of public view ([12:50–14:18]).

4. Legal Games: Deference and Lack of Adversarial Process

Nilay highlights American legal tradition's focus on textualism, asking why government interpretations in this realm stray so far: "…how do lawyers of both administrations get this far away from the dominant mode of legal decision making…?" ([19:26]).
Mike: It’s "motivated reasoning," and without adversarial input—i.e., no one pushing back in FISA court—government definitions go unchallenged ([19:45–21:29]).
FISA court historically acts as a "rubber stamp," approving nearly all government surveillance requests ([20:37]).

5. Anthropic’s Position vs. OpenAI: Understanding “Lawful Uses”

Anthropic refused to enable mass surveillance, arguing the government’s interpretation of "lawful uses" is untrustworthy ([23:11–24:38]).
OpenAI (Sam Altman) initially agreed to all “lawful uses," perhaps without appreciating the government’s expanded interpretations ([24:38]).
Two possible explanations:
- Either Altman was unaware of these legal games; or
- OpenAI’s lawyers intended to exploit the ambiguity, just as the NSA did ([25:24]).

6. The Role of Public Exposure & the “Blunt Instrument” Administration

In past decades, public scandals (e.g., Snowden, massive data leaks, known NSA buildings in NYC) have not meaningfully curtailed government surveillance ([25:58–28:09]).
The current Trump administration is described as unusually unsubtle and direct, potentially forcing a more open societal reckoning over surveillance and tech company resistance: "They just announce their intentions… maybe all administrations should just announce their intentions and see where the chips fall." (Patel, [25:58–27:06]).

7. The Third-Party Doctrine and Cloud Age Vulnerability

The Fourth Amendment (against unreasonable search/seizure) is undermined because so much user data is held by third parties (cloud providers, ISPs, etc.):
- "…the third party doctrine has sort of swallowed the entire Fourth Amendment…" (Masnick, [34:40–36:35])
Government often bypasses warrant requirements for data stored outside homes/personal devices ([34:40–38:57]).
Companies (e.g., Apple, Amazon) sometimes push back, but outcomes vary.

8. Anthropic as a Civic Gatekeeper: New vs. Old Boundaries

The current fight centers on Anthropic’s refusal to let government agencies use its AI (Claude) on large troves of commercially acquired, third-party data for bulk analysis ([38:57–40:18]).
Nilay draws equivalences to tech companies acting as "resistance" and standing up for user privacy: "[T]here’s just a part of, however our system works in which big private companies get to say no to the government on behalf of their customers. And this felt the same…" ([40:18])

9. Escalation: Supply Chain Risk and Retaliation

Unlike previous tech/government disputes, the Pentagon’s aggressive move—labeling Anthropic a supply chain risk—aims to destroy the company’s business for its ethical stance ([41:06–43:15]).
Mike: "…that is an escalation."

10. The First Amendment & Compelled Speech

Civil liberties group FIRE frames Anthropic’s case as a matter of "compelled speech": forcing a company to write code it doesn’t want to write may violate the First Amendment ([43:15–44:58]).
Masnick: "…I do think it is a valid argument… companies definitely raised First Amendment claims… in terms of trying to build backdoors into encrypted systems."

Notable Quotes & Memorable Moments

On Legal Language and Power:

"The NSA has its own dictionary that is somewhat different than the dictionary you and I use… so they can interpret words in ways that are different than the plain English meaning—including words like ‘target,’ which feels like kind of a key word."
— Mike Masnick ([09:44])
On Partisan Consistency:

"Nobody, and certainly no president, wants to be president during the time when there’s a big terrorist attack because that makes them look bad."
— Mike Masnick ([12:50])
On Anthropic’s Resistance:

"…we just don’t want to be part of that. That’s the fight."
— Nilay Patel ([23:11])
On Legal Game-Playing:

"The alternative theory...is that he [Sam Altman]/OpenAI...knew this but thought they could play the same game as the NSA..."
— Mike Masnick ([24:38])
On Surveillance Expansion:

"…all of these revelations, these leaks, we haven’t backed it off— in fact, it’s only increased as much of our lives has gotten more and more digital."
— Nilay Patel ([25:58])
On Third-Party Doctrine:

"…the third party doctrine has sort of swallowed the entire Fourth Amendment…"
— Mike Masnick ([36:35])
On Escalation:

"…this administration is effectively saying if you don’t give us absolutely everything that we want… then we will effectively try to destroy your entire business. And that, that, that is an escalation."
— Mike Masnick ([41:06])
On Compelled Speech:

"…it is fairly compelling compelled speech. But no, I do think it is an interesting argument."
— Mike Masnick ([43:59])
On the Broader Stakes:

"Every Bill of Rights amendment has to be challenged in some form or another with every, every possible issue. I’m sure we can fit a Third Amendment violation somewhere in here as well."
— Mike Masnick ([45:08])

Key Timestamps

| Time | Segment | |---------|-----------------------------------------------------------------| | 01:28 | Nilay’s introduction & framing the Anthropic/Pentagon dispute | | 04:33 | Mike Masnick introduced | | 06:38 | History of surveillance laws and reinterpretation by intelligence agencies | | 09:44 | NSA’s redefinition of key legal terms (e.g., “target”) | | 12:50 | How both parties and branches expanded surveillance | | 19:26 | U.S. legal tradition and reinterpretation by government lawyers | | 21:29 | Who pushes back inside the process? (Snowden, whistleblowers) | | 23:11 | Comparing Anthropic and OpenAI stances, legal language games | | 27:06 | Potential reckoning in the Trump era due to blunt rhetoric | | 34:40 | Third-party doctrine explained, Fourth Amendment’s erosion | | 36:35 | “Everything is third party data” — implications for user privacy| | 38:57 | Difference between cloud storage and AI analysis on bulk data | | 41:06 | Legal escalation: supply chain risk and Anthropic’s resistance | | 43:15 | Compelled speech and free speech implications | | 45:08 | "Bill of Rights challenge" – philosophical ramifications |

Language & Tone

The discussion is energetic, occasionally sardonic, and never dry; Nilay and Mike combine legal nuance with pointed skepticism and a dash of humor.
Nilay often frames the conversation in plain, relatable terms (“turning into the Joker,” “pinky swore”), while Mike offers historical and legal context with clarity.

Final Thoughts

The episode makes it clear that, despite decades of public debate and occasional pushback, the surveillance state’s growth has largely been incremental and bipartisan. With AI, the stakes escalate—and companies like Anthropic are demanding to set ethical boundaries, even as the government aims to sweep past them using familiar legal tactics. This ongoing drama underscores both the fragility of statutory protections in the digital age and the unexpected role tech companies are now playing as stewards (or stumbling blocks) for constitutional rights.

For anyone new to the story or to the legislative history of U.S. surveillance, this episode provides essential grounding, relevant case studies, and a sense of the unresolved challenges at the heart of technology, law, and state power in the AI era.

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Transcript

A (0:00)

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B (1:28)

Hello and welcome to Decoder. I'm Nilai Patel, editor in chief of the Verge and Decoder is my show about big ideas and other problems. Today we're going to talk about the messy, fast moving situation at Anthropic, the maker of Claude that now finds itself in a very ugly legal battle with the Pentagon. The back and forth is complicated, but as of a few days ago, the Pentagon had deemed Anthropic a supply chain risk and Anthropic had filed a lawsuit challenging that designation, saying that the government was violating its first and Fifth Amendment rights and quote, state seeking to destroy the economic value created by one of the world's fastest growing private companies. I can tell you right now we're going to be talking about the twists and turns of that case here on Decoder and on the Verge many, many times in the months to come. But today I want to take a step back and really dig in on one very important part of this situation that hasn't gotten nearly enough attention as things have spiraled out of control. How the United States government does surveillance, the legal authority that allows that surveillance to occur, and why Anthropic was so distrustful of the government saying it would the Law when it comes to using AI to do even More surveillance My guest today is Mike Masnik, the founder and CEO of Tector, the excellent and long running tech policy website. Mike has been writing about government overreach, privacy in the digital age, and other related topics for decades now, and he's an expert on how the Internet and surveillance state have grown up in interconnected ways. You see, there's what the law says the government can do when it comes to surveillance. There's what the government actually wants to do, and most importantly, there's what the government says says the law says it can do, which is often exactly the opposite of what any normal person simply reading the law would think. You'll hear Mike explain in great detail in this episode that we cannot and should not take the United States government at its word when it comes to surveillance. There's just too much history of government lawyers twisting the interpretations of simple words like target to expand surveillance in complicated ways, ways that usually only cause concern in legal circles and only bubble up to the mainstream when there are huge controversies like the Snowden revelations. But there's nothing subtle or sophisticated about policymaking in the Trump era. And so with Anthropic, we are now having a very loud, very public debate about technology and surveillance in real time on the Internet, in blog posts and posts on X, and press conference sound bites. There are positives and negatives to that, but to make sense of it all, you really have to know the history. That's what Mike and I set out to explain in this one. Whatever your views on AI and the government, this episode will make it clear that both parties have let the surveillance state get bigger and bigger over time. And we're on the cusp of the biggest expansion yet when it comes to AI. Before we start, a quick reminder that you can listen to this episode or any episode of Decoder completely ad free by subscribing to the Verge. Just go to theverge.com subscribe okay, Tech Dirt founder and CEO Mike Mazdick on anthropic, the Pentagon and AI surveillance. Here we go. Mike baby, you are the founder and CEO of Tech Dirt. Welcome to Decoder.

A (6:38)

Yeah. And, yeah, it sort of depends on how deep you want to go. But the sort of short version is Obviously in the post 911 world where we, the US passed the Patriot act, which had, you know, some ability for the government to engage in surveillance, which was supposed to be for, you know, protecting us against future terrorist threats. And over time, that got interpreted in interesting ways, and there were some limits on that we also had the FISA court, which is a special court that is supposed to, you know, review the intelligence community and their activities, but has been traditionally a one sided court. Only one side gets to plead their case to that court. And it's all done in secret. And so there's a lot of stuff that, that was not known. And then there was one other piece in all of this which goes all the way back to Ronald Reagan, which is Executive Order 12 Triple 3 3, which is supposedly about setting out the rules of the road for intelligence collection. And so you have these three sets of laws. Well, you know, a few sets of laws and an executive order that to the public, the parts that you can read, seem to say certain things about what our government and the NSA in particular can do in terms of surveillance, which when read with a plain English dictionary, the nature of which you and I probably have and understand, we would come away with a belief that the NSA's ability to surveil Americans was, was very limited, in fact, you know, to the point that they're supposed to, you know, if they realize that they are surveilling a U.S. person, that they are supposed to immediately stop and cry foul and, you know, erase the data and all of this other stuff. And there were rumors for a while that that was not really happening. And there were hints. And in particular, Senator Ron Wyden was very vocal about, you know, going on the floor of the Senate and saying, you know, something is not right here, and I can't quite tell you what. Or in hearings, he would ask intelligence officials, are you or are you not collecting mass data on Americans? And they would either deflect or in some cases outright lie. And I believe it was one hearing in like 2012 with James Clapper, who was the Director of National Intelligence at the time. He was asked directly on this point, and he basically said, no, we don't collect data on Americans. And that was a big part of what inspired Ed Snowden to leak the data. The, the, the reports that he leaked to Glenn Greenwald and Bart Gelman and Laura, Laura Poitras as well. So from all of that, what we began to discover was that the NSA has its own dictionary that is somewhat different than the dictionary that you and I use, such that they can interpret words in ways that are different than the plain English meaning of them, including words like target, which feels like kind of a key word. But so, you know, a sort of broad understanding of what this is. In theory, they are only supposed to target people who are not US Persons I think is the phrase. But the way it had been interpreted over time was that anything that mentions that person, any, anything that is about a foreign person is now fair game, even if that is the communications of a US person. So if you and I were to text each other and mention a foreign person, that is now fair game for the NSA to collect and to keep and to store. There's a second part of this I mentioned first, the, the Executive Order 12 Triple 333 from Ronald Reagan, which effectively allowed the NSA as, as the technology changed over time and the Internet grew, it allowed the NSA to tap into foreign communications, but that included any communications that maybe left the US on route somewhere. So if, you know, if I'm texting you and a message went from me in California through a fiber optic cable that happened to leave the U.S. the NSA could put a tap in the part once it's outside the US collect that information, even if it was just going to you within the US and then what they could do is keep that information, even if it was on US Persons and they could do specific searches on that later sometimes referred to as backdoor searches. So they collected this information that we believe they weren't supposed to collect in the first place, but they could keep it. And they promised, they sort of pinky swore that they would keep it private. But if they did a search and found like that you or I mentioned a foreign person, then suddenly it was fair game for them to do whatever they want with in total that has turned into a world in which they can basically collect any information that happens to touch outside the US and even if entirely between two US Persons, if they mention or even hint at someone who is not a US Person, suddenly it is fair game to be collected. And from that we've gotten what appears to be a form of mass surveillance of U.S. persons by an NSA that claims and publicly states that they do not spy on US persons.

B (31:33)

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A (41:06)

I mean, we'll see in the past when that's happened, and it's happened plenty of times with, with most of the, the large tech companies, at some point they've said something is a bridge too far. And where that normally goes is to court. And that, you know, the companies will go to court or the administration will go to court and there'll be some sort of court battle. I mean, you know, backdooring the iPhone is a perfect example of that sort of went to court. And they sort of fought it out, though they never quite got to a conclusion because the FBI eventually did just manually break into the iPhone and then didn't want the court ruling to ruin the future. But in this case, you know, where the escalation is and where this is different than those past situations is that rather than just going to court, they did this supply chain risk designation which is just insane. You know, this idea that this tool which was designed to stop, you know, far potential foreign malicious actors from supplying technology that could then, you know, put in hidden surveillance tools into the larger technology stack, that those could be banned. To apply that to a US based company basically for having an ethics policy feels like a real misuse of that tool. And even that tool, I think was questionable in some ways. But you could understand the impetus behind it. For when you're talking about a Chinese networking firm or something along those lines here, it makes no sense. And so the reaction to this goes so far beyond what would normally be seen in this case. You could see, know, traditionally there would be some sort of court case and either side could start it and it would just be a battle about, you know, what, what, you know, how the contract could be applied. But that's not what is happening here. That, that this administration is effectively saying if you don't give us absolutely everything that we want, if you don't set up your tools to work the way we want them to work, then we will effectively try to destroy your entire business. And that, that, that is an escalation.

C (47:30)

One of the things that makes the Verge, I think, really unique and respected is how strong our ethics policy is, where our coverage is definitely not for sale. But we do still have a huge advertising business. That's a big part of what supports the Verge. And so a big part of my job is to work with our partners, our advertisers, our sales team, to help them understand the Verge, why they should advertise with us, what opportunities we can develop. We've made new ad products like Quick Post ads. They're clearly disclosed. We want to make good advertising that people like because that also makes ads perform better. And so in running that business, I'm kind of on that side of the house. We also, for the last year, I think, as many people here know, have really big subscriptions business. And that's, you know, the single most important thing any individual person can do to support our coverage in this moment is subscribe to the Verge benefits you get with a Verge subscription. You obviously get unlimited access to read the Verge. We now have an ad free version of this podcast feed decoder where you can subscribe and get the feed for free. And then if you are interested in the story of AI and policy and some of the themes of this episode, your subscription also gets you a bunch of newsletters you should really enjoy. Tina Nguyen has a fantastic newsletter about MAGA tech policy and how all of this is unfolding called Regulator. If you're interested in the product side of it, I'd really recommend Victoria Song's newsletter Optimizer about the crazy AI intersection with wellness and how we all live David Pierce's weekend Read Installer is always one of my favorite, like what little things should I play with that are new and interesting? And there's a lot of product playing out there right now. A Verge subscription annually. And because I'm the publisher in Firewall, I will shill shamelessly. A Verge subscription right now starts at $40 for the first year. It is incredibly good value and it also supports all of this work we need to do and helps us invest in hiring more reporters to cover this story.