The Pentagon is designating artificial intelligence company Anthropic a “supply chain risk” to U.S. national security, Defense Secretary Pete Hegseth said Friday.
It’s an extraordinary step by the Pentagon and believed to be the first time an American company has received the designation. The announcement from Mr. Hegseth came just minutes after President Trump ordered the federal government to stop doing business with Anthropic, maker of the popular Claude AI tool that has been integrated deep into numerous areas of the U.S. military and federal agencies.
By declaring Anthropic to be a supply chain risk, other companies cannot do business with Anthropic if they want government contracts.
The move could upend hundreds of millions of dollars in government contracts and fundamentally alter the relationship among the Pentagon, Silicon Valley and the broader defense industrial base.
The move is the culmination of a dispute that centered on the Pentagon’s demand that Anthropic allow for unlimited use of Claude AI in the military. Anthropic sought iron-clad assurances that the military would never use Claude for mass surveillance of Americans or for the development of fully autonomous weapons.
Despite intense negotiations, the two sides could not come to an agreement, though the Pentagon said it did not intend to engage in mass surveillance or the use of fully autonomous AI-powered weapons.
SEE ALSO: Trump orders federal government to stop using Anthropic in dispute between AI firm and Pentagon
“Anthropic’s stance is fundamentally incompatible with American principles. Their relationship with the United States Armed Forces and the Federal Government has therefore been permanently altered,” Mr. Hegseth wrote on X, adding that the supply-chain risk designation is effective immediately.
“America’s warfighters will never be held hostage by the ideological whims of Big Tech. This decision is final,” the secretary said.
Until Friday, the designation is believed to have been used only for foreign companies, including ones based in adversary nations such as Russia and China.
Anthropic currently has a reported $200 million in federal contracts.
In a statement Thursday, Anthropic CEO Dario Amodei said he could not in good conscience agree to the Pentagon’s demands but wanted to continue working with the military.
“Our strong preference is to continue to serve the department and our warfighters — with our two requested safeguards in place,” he said. “Should the department choose to offboard Anthropic, we will work to enable a smooth transition to another provider, avoiding any disruption to ongoing military planning, operations or other critical missions. Our models will be available on the expansive terms we have proposed for as long as required.”
The clash between the Pentagon and Anthropic began after reports that U.S. forces used Claude in the operation to capture then-Venezuelan President Nicolas Maduro in Caracas last month.
Anthropic says its usage guidelines prohibit Claude from being used to facilitate violence, develop weapons or conduct surveillance.
