Anthropic has suspended access to its newest AI models, Fable 5 and Mythos 5, for all foreign nationals—including its own foreign national employees—following a directive from the U.S. government, according to an announcement late Friday. The move affects one of the world's fastest-growing AI markets, India, where both Anthropic and rival OpenAI have named the South Asian nation their second-largest market after the United States. The timing is particularly notable: the suspension came just days after Anthropic announced a high-profile partnership with Indian IT services giant Tata Consultancy Services aimed at expanding enterprise AI adoption across the country, underscoring how deeply India's AI roadmap has become intertwined with U.S.-developed technology.
The security concerns that triggered the government action were first flagged to officials by Amazon CEO Andy Jassy, according to reports. The Information has since reported that the White House is unlikely to impose similar restrictions on other AI companies and is privately faulting Anthropic's handling of alleged jailbreak vulnerabilities. Anthropic has pushed back on the government's characterization of the situation, arguing that the action should not have been taken. The dispute has left the broader implications unclear but has intensified conversations in India about whether the country can continue depending on a small group of U.S. frontier model providers for technologies that are rapidly becoming critical infrastructure.
The episode has triggered fresh debate among Indian founders, investors, and policy experts, with three broad camps emerging: those calling for an accelerated push to build domestic AI capabilities, those advocating deeper investment in open-source alternatives, and those who argue that India should maintain its current course of working with U.S. frontier labs. Both Anthropic and OpenAI have recently expanded their India presence with new offices, local hiring, and enterprise initiatives, betting on the country's vast pool of developers, startups, and businesses to drive adoption of their latest systems. For some Indian stakeholders, the suspension is a wake-up call about technological dependence; for others, it is a stark reminder that access to cutting-edge AI can be shaped by geopolitical decisions made far beyond New Delhi's control.