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The Department of War designated Anthropic — an American AI company — a “supply chain risk to national security,” a label previously reserved for foreign adversaries like Huawei and ZTE. The reason? Anthropic won’t remove two contract provisions: no mass domestic surveillance, and no autonomous weapons without human oversight. Anthropic says the designation is legally baseless and will challenge it in court.
Disclosure: I use Claude, Anthropic’s AI product, in my own legal practice and work flow including some editing to this article. I use it because it’s actually works pretty damn well and Claude Code is kind of wildly fun to use. Now that’s out of the way!
The federal government just blacklisted one of America’s most valuable companies because it wouldn’t delete two lines from its terms of service.
On Friday, President Trump ordered every federal agency to stop using Anthropic’s technology, calling the company “RADICAL LEFT” and “WOKE” on Truth Social. Defense Secretary Pete Hegseth then designated Anthropic a “supply chain risk to national security” — meaning every military contractor in the country must now certify they don’t use Claude in any Pentagon-related work. Hegseth accused Anthropic of “corporate virtue-signaling that places Silicon Valley ideology above American lives” and said the Department of War would transition to “a better and more patriotic service.”
Anthropic’s response was measured and direct: “No amount of intimidation or punishment from the Department of War will change our position on mass domestic surveillance or fully autonomous weapons. We will challenge any supply chain risk designation in court.”
They also noted, pointedly, that they learned about the designation from Hegseth’s tweet. “We have not yet received direct communication from the Department of War or the White House on the status of our negotiations.”
What Anthropic Actually Wants
The dispute is over two provisions in Anthropic’s contract with the Department of War. Claude can be used for virtually any military purpose — intelligence analysis, cyber operations, operational planning, and it was reportedly used in last month’s Maduro raid. Anthropic draws two lines: no mass domestic surveillance of American citizens, and no fully autonomous weapons that select and engage targets without a human in the loop. These terms were in the original contract. The Pentagon agreed to them when it awarded Anthropic a $200 million deal last July.
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