Anthropic Finally Files Lawsuit Against Pentagon Over ‘Supply Chain Risk’ Label

As expected, Anthropic has filed a lawsuit against Pentagon after Trump administration officially labeled the company a “supply chain risk.” The legal move escalates a weeks-long dispute over the military use of the company’s Claude AI models, with the start-up claiming the Trump administration is undermining its economic value.

As first reported by Financial Times, in filings with a federal court in California, Anthropic has asked judges to block the designation, calling it “arbitrary” and “capricious.” Lawyers argue that the decision threatens the company’s reputation and core First Amendment rights, and they accuse government officials of targeting one of the fastest-growing private AI companies in the U.S.

The conflict centers on how Claude can be deployed. Pentagon officials reportedly demanded unrestricted rights to use the AI for a wide range of tasks, including sensitive operations. Anthropic CEO Dario Amodei refused to remove two ethical “red lines”: prohibitions on lethal autonomous weapons and domestic mass surveillance. According to the filing, this disagreement triggered the collapse of negotiations and the supply chain risk designation.

Despite the restriction, Anthropic emphasized that most of its commercial clients, including Amazon, Microsoft, and Google, will continue using Claude outside of defense projects. The company also cited social media posts from Donald Trump, who labeled Anthropic an “out-of-control, Radical Left AI company,” and from Pentagon official Pete Hegseth, who accused the start-up of “betrayal.”

Currently, Claude remains the only AI model in classified operations, while OpenAI recently reached a separate Pentagon deal for its technology. However, the online growing backlash has triggered the AI giant to amend its deal with Pentagon. To catch you up, OpenAI’s hardware lead Caitlin Kalinowski resigned recently over similar concerns about surveillance and autonomous weapons, hinting at an unease in the AI industry. At the time of writing this, Pentagon hasn’t issued any statement regarding the lawsuit.