Eight months ago, David Sacks, the White House AI and Crypto Czar publicly accused Anthropic of running a sophisticated regulatory capture campaign built on fear mongering (save this).
People thought it was a spicy take and then Fable 5 release just turned it into evidence.
When Anthropic released its Mythos-class models, it disclosed that every prompt and output sent through them would be retained for 30 days with no exceptions including for enterprise customers who had previously signed zero data retention agreements, and for up to two years if a prompt was flagged by a safety classifier.
Microsoft moved so quickly that it restricted its own employees from using Claude Fable 5 within days of the release, citing the retention terms as incompatible with its internal policies, the largest enterprise software company in the world treating the new terms as a non-starter.
But the data retention was not even the part that generated the most outrage in the developer community.
The system card also disclosed that for users Anthropic suspected of working on frontier AI research, chip design, or competing model development, the system would automatically route those requests to a less capable model without telling the user, rewrite the prompt in the background, deliver a deliberately degraded response, and charge full price for access to a frontier model the user was not actually receiving.
Business Insider confirmed that Anthropic's own apology acknowledged the company was intentionally giving worse answers and concealing that fact from paying customers.
The examples of who triggered these filters make the safety justification difficult to defend, Ben Thompson from Stratechery was flagged for asking about the relationship between GLP-1s and cancer risk, and users asking routine questions about mitochondria were quietly downgraded, none of them aware it was happening.
Under pressure, Anthropic walked back the narrowest possible piece of the policy, they will now disclose when a request is being downgraded.
The underlying architecture, the 30 day retention, the behavioral profiling, the routing tiers, and the two-class access system remains fully intact.
This is the part that makes
@DavidSacks argument from October 2025 land differently today.
He argued that Anthropic's safety positioning was principally a regulatory capture strategy using fear-based arguments to shape rules that would entrench incumbents and damage the broader startup ecosystem.
The Fable 5 disclosure shows a company that used safety language to justify building an opaque, paternalistic system where Anthropic alone decides who is worthy of frontier AI access, profiles users to enforce that decision and collects full payment regardless.