The Pentagon Officially Notifies Anthropic That It Is a ‘Supply Chain Risk’

Anthropic has said it will sue the Defense Department over the designation, which could prevent the start-up from doing business with the U.S. government.

The Defense Department has officially informed Anthropic that it has labeled the artificial intelligence company a “supply chain risk,” which could prevent it from doing business with the U.S. government.

The Pentagon sent a formal letter to Anthropic, according to a senior Defense Department official. The exact timing of the letter was unclear.

Anthropic did not immediately respond to requests for comment. The start-up previously said it would sue the Defense Department over the supply chain designation, but it has not given details over where or when it would file suit.

Anthropic’s technology is currently being used by the Defense Department as U.S. military forces engage in a widening war against Iran, according to two people familiar with the technology who spoke on the condition of anonymity.

Anthropic analyzes data and imagery collected by the United States, which helps the military make decisions on where to deploy their forces or launch strikes.

In recent weeks, Anthropic has tussled with the Pentagon over how its A.I. could be used on classified systems. The Defense Department demanded that it be able to use Anthropic’s A.I. system for all lawful purposes, or it would cut the company off from government business.

Anthropic said it needed terms that would ensure that its A.I. technology would not be used for domestic surveillance of Americans or with autonomous lethal weapons. But the Pentagon insisted that a private company like Anthropic could not decide how its tools would be used in national security work.

Anthropic and the Defense Department failed to agree on terms by the Pentagon’s Friday afternoon deadline. After the deadline passed, Defense Secretary Pete Hegseth declared Anthropic a “supply-chain risk to national security” in a social media post. The designation is typically applied only to firms with ties to the government of China.

Mr. Hegseth also said that “no contractor, supplier or partner that does business with the United States military may conduct any commercial activity” with the company.

Anthropic said it would not sue the Pentagon until it received a formal letter notifying that it had been labeled a supply chain risk.

Although Anthropic is the only company that provides the Pentagon with artificial intelligence technologies for use on classified systems, other companies are angling to replace it. OpenAI and Elon Musk’s xAI have both signed agreements with the Defense Department to provide technology on classified systems.

(The New York Times sued OpenAI and Microsoft in 2023, accusing them of copyright infringement of news content related to A.I. systems. The two companies have denied those claims.)

OpenAI announced an agreement with the Pentagon on Friday, hours after President Trump ordered federal agencies to stop using Anthropic’s technology within six months.

Unlike Anthropic, OpenAI agreed to let the Pentagon use its A.I. systems for any “lawful purpose.” The company said it had also negotiated terms that allowed it to uphold its so-called safety principles by installing specific technical guardrails on its technology.

But after a weekend of criticism of that agreement, OpenAI said on Monday it had amended its deal to include additional protections to prevent its technology from being used in mass surveillance of Americans, though the critics argued that it still allows the Pentagon some loopholes.

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