US Orders Anthropic to Block Foreign Access to Advanced AI Models

The US government has taken the highly unusual step of ordering the pioneering AI company Anthropic to suspend foreign access to its most advanced AI models.

Anthropic has been ordered to disable access to all foreign nationals, both inside and outside the US, to its Fable 5 and Mythos 5 platforms.

Anthropic said in a statement it had not been given specific details of its national security concern.

Here's more from Reuters:

It is Anthropic's understanding that the government believes there is a method of bypassing, or "jailbreaking," a safeguard that would prevent Fable 5 from being used in identifying software vulnerabilities, the company said.

The order comes just as a previous dispute between Trump administration officials and IPO-bound Anthropic showed signs of easing across parts of the US government.

Anthropic's relationship with the government ruptured this year after it refused to allow the US military to use its AI models for domestic surveillance and fully autonomous weapons systems.

The government responded by putting Anthropic on a supply chain blacklist, set to take effect later in the year.

The action also marks a major escalation of US efforts to halt foreign adversaries' AI capabilities.

For years, US export controls have focused on the chips and tools that power AI rather than on restricting foreign access to AI itself.

Anthropic said the government has given it only "verbal evidence of a potential narrow, non-universal jailbreak".

"We disagree that the finding of a narrow potential jailbreak should be cause for recalling a commercial model deployed to hundreds of millions of people," the company said.

The government directive and Anthropic's response highlight growing tension between AI developers and regulators over how to assess risks from so-called "jailbreaks," or methods used to bypass model safeguards.

As recently as Wednesday, Anthropic had called for greater U.S. oversight of AI, including the ability to block models with unacceptable risks.

It said, however, the government action on Friday did not follow principles of fair and fact-based regulation.

Wall Street's key indices all closed the week with solid gains thanks to renewed hopes of a peace deal in the Middle East and the spectacular lift-off of the SpaceX market debut.

Despite a lack of clarity about the details of the US-Iran deal, investors were prepared to bet it was an almost done deal. At the close:

S & P 500: +0.5% to 7,431 points

Dow: +0.7% to 51,202 points

Nasdaq: +0.3% to 25,889 points

It should be noted that while US officials said a deal, including an agreement that Iran would neither procure nor develop nuclear weapons, could be signed within days, Iran's foreign minister Abbas Araqchi said that nuclear issues will be discussed in later stages and that management of the Strait of Hormuz would not return to the pre-war era.

The successful stock market debut of the Elon Musk-controlled spacecraft maker SpaceX was not in doubt though, and arguably it had a bigger impact on investor sentiment.

"The market's been stung more times about peace in the past. Yesterday (Thursday) was because Trump called off the attacks," Longbow Asset Management CEO Jake Dollarhide told Reuters.

"That was a tangible result. Today we're still waiting for proof of a deal.

"The excitement about the SpaceX IPO is what's driving the market. A healthy IPO is great for the market."

He added it could be a productive year for IPOs with artificial intelligence companies OpenAI and Anthropic also expected to make their debuts this year.

In their first day of trading, shares in SpaceX closed up more than 19% at $US161.11, with the market debut pushing the company's valuation past $US2 trillion and making Mr Musk the world's first trillionaire.

While Wall Street's gains were solid, they were outpaced by European stocks which rose around 2% after the ECB raised interest rates for the first time in three years in a bid to head off rising inflation. The MSCI gauge of stocks across the globe rose 1.2% on Friday.

That performance looks like supporting the ASX today, with futures trading pointing to a 0.4% gain when trading closed on Saturday morning.

US Treasury bond yields edged higher, nudging the greenback up a notch and in turn, nudging the Aussie dollar lower.

Hopes of a peace deal had a far more significant impact on the oil market.

The global benchmark Brent crude futures fell to its lowest level since March, while the US benchmark, West Texas Intermediate crude futures, dropped to a two-month low.

Brent crude futures: -3.4% to $US87.33/barrel

WTI futures: -3.2% to $US84.88/barrel

Spot gold inched up 0.3% to $US4,227/ounce but was down 2.3% on the week.

Dalian iron ore futures slipped 0.3% to $US113/tonne as traders weighed sluggish steel demand against impending supply concerns after BHP workers at Port Hedland voted to impose rolling stoppages on shipments.

However, the benchmark July iron ore contract on the Singapore Exchange was 0.2% higher at $US101.30/tonne on Friday.

Steel demand entered its traditional off-season, resulting in sluggish transaction volumes and market sentiment, according to a research note from Shanghai Metals Market.

Coupled with high coking coal and coke costs, which squeezed steel mill margins, iron ore procurement remained subdued, Reuters noted.

Copper on the London Metals Exchange rebounded 1.5% after two sessions of losses as hopes of the peace deal helped ease concerns about rising inflation and slower global growth.