Anthropic sues Defense Department over supply-chain risk designation

Anthropic has made good on its promise to challenge the Department of Defense (DOD) in court after the agency labeled it a supply-chain risk late last week.

The Claude maker filed two complaints against the DOD on Monday in California and Washington, D.C., after a weeks-long conflict between Anthropic and the DOD over whether the military should have unrestricted access to Anthropic’s AI systems. Anthropic had two firm red lines: It didn’t want its technology to be used for mass surveillance of Americans and didn’t believe it was ready to power fully autonomous weapons with no humans making targeting and firing decisions.

Defense Secretary Pete Hegseth argued that the Pentagon should have access to AI systems for “any lawful purpose” and that it shouldn’t be limited by a private contractor.

A supply-chain risk label is usually reserved for foreign adversaries and requires any company or agency that does work with the Pentagon to certify that it doesn’t use Anthropic’s models. While several private companies are still working with Anthropic, the firm is poised to lose much of its business within the government. 

Anthropic called the DOD’s actions “unprecedented and unlawful” and accuses the administration of retaliation in a complaint filed in San Francisco federal court. “The Constitution does not allow the government to wield its enormous power to punish a company for its protected speech,” the lawsuit reads.

The protected speech Anthropic refers to is its belief about the “limitations of its own AI services and important issues of AI safety,” per the lawsuit. The administration, including Defense Secretary Hegseth and President Trump, have criticized Anthropic and its CEO Dario Amodei as “woke” and “radical” over the company’s calls for stronger AI safety and transparency measures. 

In the lawsuit, Anthropic argued the government doesn’t have to agree with its views or use its products, but it cannot employ the power of the state to punish or suppress Anthropic’s expression.

Anthropic also argued that “no federal statute authorizes the actions taken here,” claiming the Defense Department’s supply-chain risk designation was issued “without observance of the procedures Congress required.” The law generally requires agencies to conduct a risk assessment, notify the targeted company and allow it to respond, make a written national-security determination, and notify Congress before excluding a vendor from federal supply chains. 

The firm also accuses the president of operating outside the bounds of the authority granted by Congress when he directed every federal agency to immediately stop using Anthropic’s technology, following Amodei’s statement that he would not budge on his hard lines. As a result of the statements made by both President Trump and Secretary Hegseth, the General Services Administration — the federal agency that manages government contracts and purchasing — terminated Anthropic’s “OneGov” contract, ending the availability of Anthropic services to all three branches of the federal government. 

“Defendants are seeking to destroy the economic value created by one of the world’s fastest-growing private companies,” the lawsuit reads. “The Challenged Actions inflict immediate and irreparable harm on Anthropic; on others whose speech will be chilled; on those benefiting from the economic value the company can continue to create; and on a global public that deserves robust dialogue and debate on what AI means for warfare and surveillance.”

As part of its complaint, Anthropic asked the court to immediately pause the Defense Department’s designation while the case proceeds and ultimately invalidate and permanently block the government from enforcing it. 

“Seeking judicial review does not change our longstanding commitment to harnessing AI to protect our national security, but this is a necessary step to protect our business, our customers, and our partners,” an Anthropic spokesperson said in a statement. “We will continue to pursue every path toward resolution, including dialogue with the government.” 

Anthropic filed a separate complaint in the D.C. Circuit Court of Appeals because the federal procurement law allows companies to appeal supply-chain risk designations. The petition asks the court to review and overturn the Defense Department’s decision to designate the company a national security supply-chain risk. In the complaint, Anthropic argued the move was unlawful, retaliatory, and improperly executed under federal procurement law.

This story has been updated with more details and news that Anthropic has filed a separate lawsuit in the D.C. Circuit Court of Appeals.