Artificial intelligence company Anthropic has filed a lawsuit against the US government after the Pentagon labelled the firm a “supply chain risk”, a designation that effectively blocks government agencies and contractors from using its technology.
The dispute stems from a disagreement between Anthropic and US Defence Secretary Pete Hegseth over how the military could use the company’s AI tools. Anthropic refused requests to remove restrictions in its contracts that limit certain applications of its systems, including the development of lethal autonomous weapons and large-scale surveillance of Americans.
Following the breakdown in negotiations, the administration directed federal agencies to stop using Anthropic tools. The Department of Defense then formally classified the company as a supply chain risk, meaning organisations working with the government are also prohibited from using its technology in related projects.
In its lawsuit filed in federal court in California, Anthropic argues the move is unlawful and violates constitutional protections. The company said the government cannot use its authority to punish a firm for setting responsible limits on how its technology is deployed.
Anthropic has worked with US government agencies since 2024 and was one of the first advanced AI companies to have its systems used in classified government work.
The company says the decision has already caused significant reputational and financial harm, putting existing and potential private sector contracts worth hundreds of millions of dollars at risk.
Anthropic is not seeking financial damages. Instead, it is asking the court to rule that the government’s directive exceeds presidential authority and to remove the supply chain risk designation.
Author: Kieran Seymour