Anthropic sues Department of Defense over supply-chain risk label

Anthropic filed two complaints against the Department of Defense on Monday in California and Washington, D.C. The legal action follows the Pentagon’s decision late last week to label the artificial intelligence company a supply-chain risk—a regulatory designation used by the US government to restrict vendors. In a complaint filed in San Francisco, Anthropic characterized the government’s actions as unprecedented and unlawful and accused the administration of retaliation.

The supply-chain risk designation led to the termination of Anthropic’s OneGov contract, a federal government contract managed by the General Services Administration (GSA). This termination ended the availability of Anthropic’s services across the federal government. Anthropic argues that the Department of Defense issued the designation without following required procedures. Under federal procurement law, such actions typically require agencies to conduct a risk assessment, notify the targeted company to allow a response, make a written national-security determination, and notify Congress before excluding a vendor.

The legal battle stems from a conflict over AI safety and surveillance. Anthropic had established limits on its technology, refusing to allow its use for the mass surveillance of Americans or to power fully autonomous weapons. In response, Defense Secretary Pete Hegseth argued that the Pentagon should have access to AI systems for “any lawful purpose.” Following statements by Hegseth and President Donald Trump, who directed federal agencies to stop using Anthropic’s technology, the GSA terminated the contract. The administration, including President Trump and Secretary Hegseth, has previously criticized Anthropic and its CEO Dario Amodei, labeling them as woke and radical over the company’s safety stances.

In its lawsuit, Anthropic argued that the US Constitution prevents the government from using its power to punish a company for protected speech, which it defines as its beliefs regarding AI safety and the limitations of its services. The company also argued that the government’s actions inflict immediate harm on its business and on a global public that deserves open dialogue on the role of AI in warfare and surveillance. Anthropic filed a separate complaint in the D.C. Circuit Court of Appeals to review and overturn the national security designation. An Anthropic spokesperson stated that seeking judicial review does not change the company’s commitment to using AI for national security, but called the lawsuits a necessary step to protect its business, customers, and partners.

Why it matters

The dispute highlights the growing friction between AI labs and the U.S. government over safety standards, surveillance, and the limits of executive power in federal procurement.