Anthropic has said it will challenge the US Pentagon in court over its ‘supply chain risk’ label on its AI technology.The AI firm began 2026 on a winning streak, with its sales surging, multiple products going viral and a large funding round — all giving the startup an upper hand in the costly global AI race.
‘Supply chain risk’
The Trump administration on Friday issued back-to-back directives threatening to curb the growth for one of the US’ most successful AI companies.First, US President Donald Trump ordered the federal agencies to not use the Anthropic’s software any longer, which has now become popular, especially as programming assistant.Later, the Pentagon declared the AI firm a ‘supply-chain risk’, a designation that is usually reserved for firms from countries the US sees as adversaries.The moves, which followed a tense showdown between the San Francisco-based startup and the Pentagon over AI safeguards, aim to not only to cut off Anthropic’s sales from the US government, but also numerous other firms. “No contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic,” Defense Secretary Pete Hegseth wrote in a social media post late Friday.Hegseth had given the company until 5:01 p.m. on Friday to allow the Pentagon to use Claude for any purpose within legal limits — but without any usage restrictions from Anthropic. The startup has insisted that the chatbot not be used for mass surveillance against Americans or in fully autonomous weapons operations.Anthropic’s responseIn a statement on Friday Anthropic called the move “legally unsound” and “a dangerous precedent.” The company also set the stage for a legal battle over its software. “No amount of intimidation or punishment from the Department of War will change our position on mass domestic surveillance or fully autonomous weapons,” it wrote. “We will challenge any supply chain risk designation in court.”The uncertainty hits Anthropic at a pivotal moment. The company, which was founded in 2021 by several former employees of OpenAI, is widely expected to be preparing for an initial public offering as soon as this year. With its popular Claude chatbot, Anthropic has been racing to persuade more businesses to pay for its software to help offset the immense cost of developing AI and justify its lofty $380 billion valuation.Anthropic’s recent deals with federal agenciesTrump’s decision to order agencies to ditch Anthropic posed some initial risk to the firm, though one that’s limited in scope for a company with a revenue run rate of $14 billion. Anthropic inked an agreement in July with the Defense Department worth up to $200 million, but Bloomberg Government contracting records show the Pentagon paid only $2 million to Anthropic last year.This month, Anthropic signed its first deal for the State Department to use Claude, valued at just $19,000. The company also struck a broad deal with the General Services Administration for federal government agencies to use Claude for a nominal $1 fee last year. Hegseth has set a six-month maximum for Anthropic’s services to be handed over to another AI provider.The Pentagon’s decision has quickly sent shockwaves throughout the AI community, both for its implications in the wider battle over how to deploy a powerful technology safely and because of the broad popularity of Claude Code for software development.With inputs from Bloomberg
