Anthropic has filed a lawsuit against the U.S. Department of Defense and other federal agencies after the Pentagon moved to label the AI company a “Supply-Chain Risk to National Security” and bar the use of its technology for defense purposes, a step that followed President Donald Trump’s directive in late February ordering federal agencies to stop using the company’s systems.
The legal complaint argues the government’s actions go beyond a typical contracting dispute. Anthropic alleges the designation and subsequent ban amount to an “unlawful campaign of retaliation” that threatens both the company’s reputation and its constitutional rights. In the filing, the company said its “reputation and core First Amendment freedoms are under attack” and asked a court to block the administration from enforcing the restrictions.
Anthropic also contends that the national security label — which it says has historically been applied to foreign adversaries or their affiliated companies — was improperly used against a U.S. firm. CEO Dario Amodei has previously said the designation had never before been publicly applied to an American company.
The dispute escalated after negotiations between the company and the Pentagon broke down earlier this year. Discussions had focused on how the military could deploy Anthropic’s AI systems. Anthropic and Amodei sought firm limits on certain uses, including preventing the technology from supporting mass domestic surveillance or direct deployment in lethal autonomous weapons, while the Pentagon pushed for access to the systems for “all lawful use.”
When the parties failed to reach an agreement before a Pentagon-set February 27 deadline, Trump announced on Truth Social that federal agencies must “IMMEDIATELY CEASE all use of Anthropic’s technology.”
Shortly after the president’s directive, Defense Secretary Pete Hegseth said he would move to classify Anthropic as a national security supply-chain risk. The Pentagon formally notified the company of the designation on Wednesday, effectively blocking Anthropic from doing business with the department and its defense contractors for military purposes.
Anthropic says the decision is already causing financial harm. In the lawsuit, the company argues the designation and related messaging from the White House are “jeopardizing hundreds of millions of dollars” in business and were issued without required procedures or legal authority.
“Seeking judicial review does not change our longstanding commitment to harnessing AI to protect our national security,” an Anthropic spokesperson told NBC News. “But this is a necessary step to protect our business, our customers, and our partners. We will continue to pursue every path toward resolution, including dialogue with the government.”
Before the dispute, Anthropic’s Claude AI models had been used on classified Pentagon networks through a partnership with Palantir, supporting tasks such as intelligence analysis, targeting recommendations and battle simulations. The systems have also been deployed across federal agencies to help with data analysis and administrative work.
This analysis is based on reporting from NBC News.
Image courtesy of Unsplash.
This article was generated with AI assistance and reviewed for accuracy and quality.
