In an unprecedented move, the Trump administration has designated artificial intelligence company Anthropic as a supply chain risk, following through on a threat that could force other government contractors to stop using its AI chatbot Claude.
“We have formally notified Anthropic leadership that the company and its products are considered a supply chain risk, effective immediately,” the Department of Defense said in a statement Thursday.
The decision appeared to close any opportunity for further negotiations with Anthropic, about a week after President Donald Trump and Secretary of Defense Pete Hegseth accused the company of endangering national security.
Trump and Hegseth announced a series of threats last Friday, on the eve of the Iran war, after Anthropic CEO Dario Amodei refused to back down, citing concerns that the company’s products could be used for mass surveillance of Americans or autonomous weapons.
The San Francisco-based company did not respond to a request for comment Thursday. The company previously said it would sue if the Pentagon pursues what it called “legally unsound” practices that have “never before been publicly applied against a U.S. company.”
The Department of Defense did not respond to questions in time for publication.
Some military contractors have already cut ties with tech industry rising star Anthropic, which sells Claude to a variety of companies and government agencies. Lockheed Martin said it would “follow the direction of the President and the Department of the Army” and look to other providers of large-scale language models.
“Lockheed Martin does not rely on a single LLM vendor for any part of its operations and therefore expects the impact to be minimal,” the company said. It is not yet clear whether this designation is intended to prevent the use of Anthropic by all federal contractors or only those affiliated with the military.
The Pentagon’s decision to apply rules to address supply threats from foreign adversaries quickly faced criticism from both opponents and some supporters of the Trump Republican administration. Federal code defines supply chain risk as “the risk that an adversary will sabotage, maliciously introduce unwanted functionality, or otherwise subvert a system for the purpose of destroying, degrading, or espionage.”
Sen. Kirsten Gillibrand, a New York Democrat and member of the Senate Armed Services Committee and the Senate Intelligence Committee, called this a “dangerous misuse of a tool for dealing with adversary-controlled technology.”
“This reckless action is short-sighted, self-destructive and a gift to our adversaries,” she said in a written statement Thursday.
Neil Chilson, a Republican and former chief engineer at the Federal Trade Commission who now heads AI policy at the Abundance Institute, said the decision appears to be “a massive overreach that will harm both the U.S. AI sector and the military’s ability to acquire the best technology for U.S. warplanes.”
Earlier, a group of former defense and national security officials sent a letter to U.S. lawmakers expressing “grave concerns” about the designation.
“The exercise of this power against U.S. domestic companies departs significantly from its intended purpose and sets a dangerous precedent,” said the letter from former officials and policy experts, including former CIA Director Michael Hayden and retired Air Force, Army, and Navy leaders.
They added that such a designation is “intended to protect the United States from intrusion by foreign adversaries, not by American innovators operating transparently under the rule of law, but by companies beholden to the Chinese government and Moscow. Applying this tool to punish American companies that refuse to lift safeguards against domestic mass surveillance and fully autonomous weapons is a categorical error with implications far beyond this conflict.”
Anthropic lost a major partnership with a defense contractor, but consumer downloads have skyrocketed over the past week thanks to people supporting its moral stance. Anthropic this week boasts that more than 1 million people are signing up for Claude every day, overtaking OpenAI’s ChatGPT and Google’s Gemini in Apple’s app store to become the top AI app in more than 20 countries.
The dispute with the Pentagon also deepens the bitter standoff between Anthropic and OpenAI, which on Friday announced a deal with the Pentagon to effectively replace Anthropic with ChatGPT in classified environments.
OpenAI CEO Sam Altman later said the company should not have rushed into the deal, which “looked opportunistic and sloppy.”
