Microsoft is restricting internal use of Anthropic's Claude Fable 5 due to data retention concerns, as Anthropic's new safety classifiers require retaining prompts and outputs for up to 30 days, raising legal issues for Microsoft regarding customer data and confidential information.
<figure>
<img alt="An illustration of Microsoft’s logo." data-caption="" data-portal-copyright="Image: Cath Virigina / The Verge" data-has-syndication-rights="1" src="https://platform.theverge.com/wp-content/uploads/sites/2/2025/01/STK095_MICROSOFT_CVirginia_B.jpg?quality=90&strip=all&crop=0,0,100,100" />
<figcaption>
</figcaption>
</figure>
<p class="has-text-align-none">Anthropic <a href="https://www.theverge.com/news/946725/anthropic-releases-claude-fable-5-mythos">released Claude Fable</a>, its first Mythos-class AI model, yesterday and it's already causing concerns inside Microsoft. Sources tell me that Microsoft is limiting the use of Claude Fable 5 for employees because of Anthropic's new data retention requirements. </p>
<p class="has-text-align-none">While Microsoft <a href="https://github.blog/changelog/2026-06-09-claude-fable-5-is-generally-available-for-github-copilot/">quickly rolled out</a> Claude Fable 5 to its GitHub Copilot and <a href="https://azure.microsoft.com/en-us/blog/claude-fable-5-is-now-available-in-microsoft-foundry-powering-the-next-era-of-autonomous-agents/">Foundry</a> customers, I'm told the model isn't available in the model picker that Microsoft employees use for internal versions of GitHub Copilot. All other Claude models are still available internally at Microsoft, because they operate under Zero Data Retention (ZDR) rules.</p>
<p class="has-text-align-none">I understand that Microsoft ha …</p>
<p><a href="https://www.theverge.com/report/947575/microsoft-claude-fable-5-restricted-internally">Read the full story at The Verge.</a></p>
# Microsoft restricts Claude Fable for employees over data retention concerns
Source: [https://www.theverge.com/report/947575/microsoft-claude-fable-5-restricted-internally](https://www.theverge.com/report/947575/microsoft-claude-fable-5-restricted-internally)
[](https://www.theverge.com/authors/tom-warren)
Tom Warren
is a senior correspondent and author of[*Notepad*](https://www.theverge.com/notepad-microsoft-newsletter), who has been covering all things Microsoft, PC, and tech for over 20 years\.
Anthropic[released Claude Fable](https://www.theverge.com/news/946725/anthropic-releases-claude-fable-5-mythos), its first Mythos\-class AI model, yesterday and it’s already causing concerns inside Microsoft\. Sources tell me that Microsoft is limiting the use of Claude Fable 5 for employees because of Anthropic’s new data retention requirements\.
While Microsoft[quickly rolled out](https://github.blog/changelog/2026-06-09-claude-fable-5-is-generally-available-for-github-copilot/)Claude Fable 5 to its GitHub Copilot and[Foundry](https://azure.microsoft.com/en-us/blog/claude-fable-5-is-now-available-in-microsoft-foundry-powering-the-next-era-of-autonomous-agents/)customers, I’m told the model isn’t available in the model picker that Microsoft employees use for internal versions of GitHub Copilot\. All other Claude models are still available internally at Microsoft, because they operate under Zero Data Retention \(ZDR\) rules\.
I understand that Microsoft has been telling employees that its legal teams are evaluating changes to Anthropic’s data retention requirements\. I’m told that the main concerns are around customer data and confidential information, and that it’s not yet clear whether Microsoft’s legal teams will clear Claude Fable for internal use\.
Claude Fable 5[requires data retention](https://support.claude.com/en/articles/15425996-data-retention-practices-for-mythos-class-models)to operate Anthropic’s new safety classifiers, meaning Anthropic retains prompts and outputs and deletes this data after 30 days\. Some prompts and outputs can even be stored for up to two years if they’re flagged as violating Anthropic’s usage policy, so there are legal concerns around how Microsoft should be using Claude Fable 5\.
Claude Fable 5 is the first broad release from Anthropic’s Mythos class of AI models, and it arrives just weeks after the company said the family was so capable at cybersecurity tasks that it was[too dangerous to release publicly](https://www.theverge.com/ai-artificial-intelligence/917644/anthropic-claude-mythos-breach-humiliation)\. Anthropic has put prompt safeguards in place to make Fable 5 less dangerous, leading to these challenging data retention changes\.
We reached out to Microsoft to comment its use of Claude Fable 5, but the company didn’t respond in time for publication\.
**Follow topics and authors**from this story to see more like this in your personalized homepage feed and to receive email updates\.
- Tom Warren
Anthropic covertly throttled Claude Fable 5 performance for users training competitor models, faced researcher backlash, and reversed the decision. Microsoft also restricted usage due to data retention policy conflicts.
Anthropic's Claude Fable 5 release is notable not just for its capabilities but for the controlled access, data retention policies, and infrastructure requirements that signal a shift towards gated frontier AI deployment.
Anthropic disables its Claude Fable 5 and Mythos 5 AI models after receiving a US government export control directive citing national security concerns, escalating tensions between the company and the Trump administration.
Anthropic announces a 30-day data retention policy for Mythos-class models (Claude Mythos 5 and Fable 5) for safety and misuse detection, affecting enterprise and zero-data-retention customers starting June 9, 2026.
Anthropic's Fable 5 model introduces invisible safeguards that silently limit Claude's assistance on tasks related to frontier AI development, raising concerns about transparency and supply chain risk for businesses that increasingly use AI techniques in ordinary product development.