The Department of Defense is moving to designate Anthropic as a supply chain risk, a significant escalation by the government that could threaten how the AI startup does business with other U.S.-based companies.
Anthropic said in a statement Friday night that it would fight back.
“We will challenge the supply chain risk designation in court,” Anthropic’s statement said, adding that the company had not received “direct communication from the Department of the Army or the White House regarding the status of negotiations.”
“No amount of threats or penalties from the Department of the Army will change our position on domestic mass surveillance and fully autonomous weapons,” the company said in a statement.
The reaction comes after Secretary of Defense Pete Hegseth said in a post on X that he would direct his department to classify Anthropic as a “supply chain risk to national security.”
“Effective immediately, contractors, suppliers, or partners who do business with the U.S. military may not engage in any commercial activity with Anthropic,” Hegseth said in the post.
This move is tantamount to blacklisting US-based companies.
This comes shortly after President Donald Trump ordered federal agencies to stop using Anthropic’s technology amid a dispute between the AI giant and the Department of Defense.
“We don’t need it, we don’t want it, and we will never do business with them again,” President Trump told Truth Social on Friday.
President Trump said there will be a six-month phase-out period for agencies “that use Anthropic products at various levels,” including the Department of Defense.
“We are the ones who decide the fate of our country, not an out-of-control radical left-wing AI company run by people who have no idea what the real world is,” Trump wrote.
The White House’s decision was preceded by a Friday evening deadline given by defense officials to Anthropic to agree to military terms of use for the company’s Claude Frontier model.
Earlier this week, the two parties reached an impasse over how the military could deploy Claude.
The issue appeared to revolve around two safeguards that Anthropic was unwilling to withdraw: mass surveillance of American citizens and autonomous weapons.
Mr. Hegseth had given Anthropic CEO Dario Amodei permission to join the military by 5:01 p.m. ET on Friday. Hegseth also warned that the government could invoke the Defense Production Act, a wartime law that gives the president broad powers over corporate resources, and designate Anthropic as a supply chain risk.
Both would be unprecedented moves by the government against U.S. technology companies, experts previously told Business Insider.
Amodei announced in a blog post Thursday that the Pentagon had added language to the contract allowing “any lawful use” of the model.
A person familiar with the negotiations told Business Insider that the language effectively gave the military discretion over how to use Claude.
Anthropic’s CEO said in a post that the company would like to continue serving the sector but cannot “in good conscience comply with their request.”
