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In a blog post Thursday, Anthropic chief executive Dario Amodei vowed to fight the designation in court, saying “we do not believe this action is legally sound.”
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Alan Rozenshtein, a professor at the University of Minnesota Law School, said that a supply-chain risk designation under section 3252 shouldn’t even apply in Anthropic’s case. In writing the law, he said, Congress was taking aim at foreign companies to address “malware or back doors or sabotage into government systems,” not target an American business like San Francisco-based Anthropic.
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“If this counted as a supply chain risk, then anytime the government disagreed with any U.S. company about any contract terms, it could call that company a supply chain risk and destroy it,” Rozenshtein said. “I don’t think that’d be constitutional.”
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Trump and Hegseth have spelled out a six-month transition period to shift AI work to other providers, leaving a door open to more talks. The president often takes hard-line public stances on issues — his frequent threats on tariffs, for example — that he later softens. It’s possible that the supply-chain designation is also a negotiating tactic, aimed at forcing Anthropic to ease the conditions it’s seeking to impose on use of AI for warfare.
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For now, though, talks have stalled. In his post Thursday, Amodei said he’d been holding “productive” conversations with the Pentagon regarding the company’s concerns. Yet Emil Michael, the U.S. under secretary of defence for research and engineering who had been negotiating with Amodei over the past several weeks, said in an X post late Thursday that conversations with the company were over.
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“I want to end all speculation: there is there is no active @DeptofWar negotiation with @AnthropicAI,” Michael wrote.
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Already, other U.S. government agencies including the Treasury Department and General Services Administration have said they’re dropping Anthropic in the wake of Trump’s order. The company’s arch-rival OpenAI announced an agreement of its own for classified Pentagon AI work hours after Trump and Hegseth demanded Anthropic’s exit from government.
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Against Huawei, the U.S. government moved nearly a decade ago to declare the Shenzhen, China-based telecommunications equipment maker a supply-chain risk and bar it from government procurement, then gradually escalated restrictions with measures from agencies including the Federal Communications Commission to block it from working with any U.S. company.
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While Hegseth had threatened last week to bar other military contractors or their partners from conducting “any commercial activity with Anthropic,” the Pentagon’s official designation stopped short of that. Amodei said that the statute invoked is narrowly tailored enough to keep it from affecting other Anthropic business that’s unrelated to specific Pentagon contracts.
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That offered some reassurance for customers and investors who feared the company could lose the ability to do any business with companies that worked with the Pentagon. Spokespeople for Microsoft Corp. and Alphabet Inc.’s Google said their companies had concluded that they can continue to work with Anthropic on non-defence projects.
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Even so, the designation means the company has to stop working with Palantir Technologies Inc., another military contractor. That includes Palantir’s use of Anthropic’s Claude in the digital mission control platform known as Maven Smart System, which has been deployed in the U.S. military’s Iran campaign.
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The decision also threatens to slow a broader Pentagon effort to accelerate adoption of AI across the U.S. military. Until recently, Anthropic provided the only AI system that could operate in the Pentagon’s classified cloud, and its Claude Gov tool has become a favoured option among defence personnel for its ease of use.
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