AI Clash: Anthropic Vows to Sue Pentagon Over Risk Designation
Pentagon brands Anthropic a supply chain risk, sparking a legal battle with the AI firm over defense contracts, surveillance concerns, and US tech policy tensions.
The US has officially designated artificial intelligence (AI) firm Anthropic as a supply chain risk, setting up a legal battle unlike any before.
This Pentagon designation marks the first time a US company has been labeled a supply chain risk, meaning the government doesn't consider Anthropic safe enough to use.
This has prompted Anthropic, which had previously refused to give defense agencies unrestricted access to its AI tools due to concerns about mass surveillance and autonomous weapons, to challenge the decision in court.
Chief Executive Dario Amodei wrote Thursday evening, "We do not believe this action is legally sound, and we see no other option but to challenge it in court."
In a statement earlier Thursday, a senior Pentagon official said the supply chain risk designation was "effective immediately."
Amodei wrote that Anthropic had received a letter from the Defense Department the previous day notifying it of the risk, noting that the designation "has a narrow scope."
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"By law, the Secretary of War must use the least restrictive means to accomplish the goal of protecting the supply chain," he wrote. Even for Department of War contractors, the supply chain risk designation does not (and cannot) limit cloud use or business relationships with Anthropic if they are not related to their specific Department of War contracts.
The AI developer had been in recent talks with the Department of Defense.
According to a person familiar with Anthropic, who asked not to be identified, those talks were not fruitful, in part because President Donald Trump and other members of his administration had publicly criticized the company.
Anthropic's leadership last week thought the two sides were close to a resolution after weeks of back-and-forth. Then Trump posted on his Truthout social platform that he was directing all federal agencies to stop using Anthropic, the person familiar added.
"We don't need it, we don't want it, and we won't do business with them again!" Trump wrote in a Friday post.
Hegseth followed up with a post on X Anthropic will be "immediately" designated a supply chain risk, preventing any business from working with it. The military has been barred from "any commercial activity with Anthropic."
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Anthropic said it had not received any information from the White House or the Pentagon regarding these statements.
According to a person familiar with the discussions, there is a feeling within Anthropic that some in the Trump administration dislike it because its chief executive is not among the tech leaders who have donated large sums to Trump or publicly praised him.
On Thursday, tech giant Microsoft said it would continue to incorporate Anthropic technology into products for its clients, except for the US Department of Defense.
"Our lawyers have studied the designation and concluded that Anthropic products, including Cloud, can remain available to our customers."
"We can continue to work with Anthropic on non-defense-related projects," it added.
The Department of War is a secondary name given by Trump to the Department of Defense.
A Pentagon official said on Thursday: "From the beginning, this has been about one fundamental principle: the military should be able to use technology for all lawful purposes."
"The military will not allow any vendor to infiltrate the chain of command and endanger our warfighters by restricting the lawful use of a critical capability."
Anthropic has been used by the US government and military since 2024 and was the first advanced AI company whose tools were deployed in government agencies performing classified work.
However, as its relationship with the US military has deteriorated, its competitor, OpenAI, has stepped in.
OpenAI's chief executive and co-founder, Sam Altman, said that their new contract with the Defense Department "contains more guardrails than any previous agreement for classified AI deployments, including Anthropic."
Senator Kirsten Gillibrand said on Thursday that labeling Anthropic a supply chain risk was "short-sighted, self-defeating, and a gift to our enemies."
Gillibrand added, "The government's blatant attack on an American company because it refused to compromise its safety practices is something we expect from China, not the United States." Anthropic's AI app, Cloud, remains popular despite the company's public feud with the US government.
Cloud is the most downloaded AI app in several countries. Anthropic's chief product officer said on Thursday that "more than a million people are signing up for Cloud every day."
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