Anthropic Defends Itself Against US Military ‘Risk’ Label
▼ Summary
– U.S. Defense Secretary Pete Hegseth designated AI company Anthropic as a “supply-chain risk,” immediately prohibiting military contractors and partners from doing business with it.
– The designation followed failed negotiations where Anthropic refused to allow unrestricted military use of its AI, citing concerns over mass surveillance and autonomous weapons.
– Anthropic announced it will legally challenge the designation, arguing it sets a dangerous precedent and that the Secretary lacks the statutory authority for such a broad restriction.
– The move caused significant alarm in Silicon Valley, with critics calling it an overreach that damages a leading American AI company.
– The practical impact remains unclear, as legal experts state it is currently impossible to determine which Anthropic customers must sever ties.
The recent decision by the U.S. Department of Defense to label Anthropic as a supply-chain risk has ignited a fierce debate, creating significant uncertainty for government contractors and the broader tech industry. This designation, announced by Secretary of Defense Pete Hegseth, immediately prohibits any military contractor or partner from engaging in commercial activity with the AI company. The move stems from a breakdown in negotiations, where Anthropic sought explicit contractual prohibitions against using its technology for mass domestic surveillance or fully autonomous weapons, while the Pentagon pushed for broader application to “all lawful uses.”
Anthropic has vowed to legally challenge the designation, arguing it sets a dangerous precedent for any American firm negotiating with the government. The company contends that Secretary Hegseth lacks the statutory authority to impose such sweeping restrictions on its commercial relationships. Furthermore, Anthropic states it received no direct communication from the Defense Department or White House regarding the negotiations preceding this abrupt action. A supply-chain risk label is typically used to exclude vendors deemed a security threat, often due to foreign influence, from defense contracts to protect sensitive systems and data.
Reaction from policy experts and industry leaders has been swift and severe. Dean Ball, a former White House AI policy advisor, called the action “the most shocking, damaging, and over-reaching thing” he has witnessed, framing it as effectively sanctioning an American company. Across Silicon Valley, figures like Y Combinator founder Paul Graham criticized the administration’s approach as impulsive. An OpenAI researcher warned that “kneecapping” a leading AI firm represents a major strategic misstep. In a contrasting development, OpenAI CEO Sam Altman announced his company secured a Defense Department agreement to deploy its models in classified settings, explicitly citing shared principles against mass surveillance and for human control over autonomous weapons.
The immediate fallout has created widespread confusion among Anthropic’s customers. The company argues the legal authority cited, 10 USC 3252, applies only to direct Defense Department suppliers and not to how contractors use its Claude AI software for other clients. Legal experts confirm the situation is murky, noting that Hegseth’s announcement appears untethered from clear, established law, making it impossible to determine which customers, if any, must sever ties. This legal ambiguity leaves numerous businesses scrambling to assess their compliance obligations and the future of their AI integrations.
(Source: Wired)
