TLDR: US artificial intelligence leader Anthropic has announced a significant tightening of its terms of service, explicitly prohibiting Chinese-owned and controlled entities from accessing its AI services, regardless of their operational location. This move, which extends existing restrictions on ‘authoritarian regions’ like Russia, North Korea, and Iran, is expected to impact Anthropic’s revenues by ‘low hundreds of millions of dollars’. The company, recently valued at $183 billion after a $13 billion funding round, aims to reinforce its commitment to AI safety and responsible development amidst a competitive global AI landscape.
SAN FRANCISCO – Anthropic, a prominent US artificial intelligence company, has implemented a more stringent policy to bar Chinese-owned and controlled entities from utilizing its AI services. The San Francisco-headquartered firm, known for its Claude chatbot and its emphasis on AI safety and responsible development, announced this update to its terms of service on Friday, September 5, 2025, as it intensifies restrictions on what it terms ‘authoritarian regions.’
Previously, companies based directly in China, Russia, North Korea, and Iran were already unable to access Anthropic’s commercial offerings due to legal and security considerations. However, the company observed that some groups were circumventing these restrictions, often by operating through subsidiaries incorporated in other countries. The revised policy directly addresses this loophole, stating that it ‘prohibits companies or organizations whose ownership structures subject them to control from jurisdictions where our products are not permitted, like China, regardless of where they operate.’ This specifically targets entities where more than 50 percent of ownership, whether direct or indirect, traces back to companies in these unsupported regions.
An executive from Anthropic disclosed to the Financial Times that this expanded prohibition is anticipated to result in a revenue impact in the ‘low hundreds of millions of dollars.’ The decision underscores the growing geopolitical tensions influencing the global technology sector, particularly in the sensitive field of artificial intelligence.
Anthropic, founded in 2021 by former OpenAI executives, has been a significant player in the generative AI race. The company recently announced a substantial funding round this week, securing $13 billion and boosting its valuation to an impressive $183 billion. This capital infusion is earmarked for expanding capacity, deepening safety research, and supporting international expansion efforts. The company currently boasts over 300,000 business customers, with the number of accounts projected to generate more than $100,000 annually having increased nearly sevenfold over the past year.
The move by Anthropic mirrors similar restrictions imposed by its US competitor, OpenAI, whose products like ChatGPT are also unavailable in China. This has spurred the rapid development of homegrown AI models from Chinese tech giants such as Alibaba and Baidu. Despite these official blocks, some users in China continue to access US generative AI chatbots through the use of VPN services.
The competitive landscape in the AI sector remains dynamic. Earlier this year, Chinese startup DeepSeek challenged assumptions about US dominance by unveiling a chatbot that reportedly matched top American systems at a significantly lower cost. While the valuations of generative AI startups, including Anthropic and its main rival OpenAI (reportedly valued at around $500 billion in recent discussions for employee share cash-outs), continue to soar, there are emerging doubts about the long-term sustainability of their financing models, given the immense spending required for computing power and chips relative to current revenue generation.
Also Read:
- Anthropic’s Claude Gov Secures $200 Million Pentagon Deal, Deepening AI Integration in U.S. National Security
- Amazon Shares Surge as Anthropic’s $183 Billion Valuation Fuels AI-Driven Growth for AWS
Addressing investor confidence, Anthropic Chief Financial Officer Krishna Rao stated in a blog post, ‘We are seeing exponential growth in demand across our entire customer base. This financing demonstrates investors’ extraordinary confidence in our financial performance.’ This latest policy adjustment by Anthropic highlights the complex interplay of technological advancement, national security, and global economic competition in the rapidly evolving AI industry.
