TLDR
- Anthropic filed a lawsuit against the Trump administration after being labeled a “supply chain risk” by the Pentagon
- It is the first time an American company has received this designation, usually reserved for foreign adversaries
- The dispute began after Defense Secretary Pete Hegseth demanded Anthropic remove restrictions on military use of its AI
- Anthropic refused to allow its technology to be used for lethal autonomous warfare or mass surveillance
- The company says the blacklisting could cost it multiple billions of dollars in 2026 revenue
Anthropic, the company behind the AI software Claude, has sued the Trump administration in a California federal court. The lawsuit was filed Monday after the Pentagon officially designated Anthropic a “supply chain risk.”
JUST IN: 🇺🇸 Anthropic sues US government after being labeled a national security risk. pic.twitter.com/ZLg5NSkbyZ
— Watcher.Guru (@WatcherGuru) March 9, 2026
The designation means any defense contractor doing business with the military must now certify they do not use Anthropic’s technology. It is the first time this label has been applied to an American company.
The conflict began when Defense Secretary Pete Hegseth demanded Anthropic remove all usage restrictions from its AI models. Anthropic declined, saying it would not allow Claude to be used for lethal autonomous weapons or domestic mass surveillance.
Those restrictions were part of Anthropic’s original government contracts. The company said Claude has “never been tested” for those uses and that it has no confidence the model would perform reliably in such scenarios.
Anthropic signed a $200 million contract with the Department of Defense in July 2024. It was also the first AI lab to deploy its technology on the Pentagon’s classified networks.
President Trump posted on social media directing all federal agencies to “immediately cease” use of Anthropic’s technology. The post called Anthropic a “Radical Left AI company.”
Financial Impact
Anthropic’s CFO Krishna Rao said in a court filing that the government’s actions could reduce the company’s 2026 revenue “by multiple billions of dollars.” The company said existing federal contracts are already being canceled.
Private sector contracts are also under threat. The company said the situation is jeopardizing “hundreds of millions of dollars” in near-term revenue.
Anthropic has asked the court to vacate the supply chain risk designation and grant a stay while the case continues. The company also filed separately in the U.S. Court of Appeals in Washington D.C.
More than a dozen federal agencies are named as defendants, including the Treasury Department, the State Department, and the General Services Administration.
Industry Support
A group of more than 30 AI engineers and scientists from OpenAI and Google filed a legal brief supporting Anthropic on Monday. Google’s chief scientist Jeff Dean was among those who signed.
The group warned that punishing a leading U.S. AI company could hurt America’s competitiveness in the field.
Despite being blacklisted, Anthropic’s models were reportedly still used to support the U.S. military operation in Iran, according to previous CNBC reporting.
Amazon confirmed that Anthropic’s Claude remains available for use by AWS customers outside of defense-related work.
Anthropic said it will continue pursuing dialogue with the government alongside the legal challenge.
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