SAN FRANCISCO: Artificial intelligence company Anthropic has filed a federal lawsuit against the U.S. Department of Defense after the Pentagon designated the firm a national security “supply chain risk,” effectively blacklisting it from defense contracts and forcing contractors to stop using its technology.
The lawsuit, filed in federal court in California, challenges the government’s decision and seeks to overturn the designation, which Anthropic argues is unlawful and retaliatory. The company says the action violates its First Amendment rights and threatens its ability to do business with government agencies and contractors.
“The Constitution does not allow the government to wield its enormous power to punish a company for its protected speech,” Anthropic said in the complaint, adding that it turned to the courts “as a last resort.”
The dispute stems from a breakdown in negotiations between the Pentagon and the San Francisco-based AI firm over how its technology could be used in military applications. Anthropic refused to remove certain safeguards from its Claude AI model, including restrictions on using the system for mass domestic surveillance or fully autonomous weapons.
Soon after talks collapsed, Defense Secretary Pete Hegseth designated the company a supply-chain risk — a classification typically reserved for foreign adversaries — and ordered defense contractors to stop using its tools.
Anthropic argues the move could cost the company hundreds of millions of dollars in government and contractor revenue and set a precedent affecting other AI firms working with the military.
The Pentagon has not publicly responded to the lawsuit. Meanwhile, the case highlights growing tensions between technology companies seeking ethical limits on AI use and governments pushing for broader military applications.