> DoD just refuses to buy a product.

That's not what happened. DOD bought a product, with terms precluding specific applications of the product. DOD decided to change the terms, vendor said no. DOD threw a hissyfit (well, Hegseth did) and said, "No one can use it if they do business with us!"

If they had just terminated their contracts with Anthropic, then there would likely be no issue beyond having to pay out any penalties for terminating a contract early. They could then go to Grok (as they did) and OpenAI and used them instead. Or even kept the contract with Anthropic and its limitations, and just used the others for the cases where Anthropic was not permitted.