Artificial intelligence company Anthropic is planning to challenge the Trump administration's decision to label it a “supply chain risk” in court.
The statement came after US President Donald Trump and Defence Secretary Pete Hegseth slammed the company following the breakdown in its negotiations with the White House over offering the military unfettered access to AI tools.
Trump said in a post on Truth Social that he would ask every federal agency to immediately stop using technology from Anthropic.
"We don't need it, we don't want it, and will not do business with them again," he wrote. He gave the Pentagon a six-month period to phase out Anthorpic's technology that was already embedded in military platforms.
Pete Hegseth claimed Anthropic had “attempted to strong-arm the United States military into submission” and said he would designate it a “Supply-Chain Risk to National Security.”
This week, Anthropic delivered a master class in arrogance and betrayal as well as a textbook case of how not to do business with the United States Government or the Pentagon.
— Secretary of War Pete Hegseth (@SecWar) February 27, 2026
Our position has never wavered and will never waver: the Department of War must have full, unrestricted…
Why Talks Broke Down Between Hegseth And Anthropic
At the heart of the negotiations was the question of giving the US military unrestricted access to its technology. The company has been concerned over the potential use of AI tools like Claude for two purposes by the military - "mass domestic surveillance" and "fully autonomous weapons", the BBC reported.
US Secretary of Defence Pete Hegseth gave an ultimatum to the creator of Claude, warning that failure to comply with the Pentagon's demands by Friday would result in the company losing its contract.
Officials also warned that Anthropic would be designated as a supply chain risk or that the Defence Production Act, a Cold War-era law, would be invoked to give the military more sweeping authority to use the company's products.
Earlier, Emil Michael, the US Undersecretary for Defence, slammed Anthropic chief Dario Amodei. "At some level, you have to trust your military to do the right thing," he told CBS News.
After days of talks, Anthropic CEO Dario Amodei said Thursday that his company "cannot in good conscience accede" to the Pentagon's demands.
The decision prompted Hesgeth to post on the social media platform X: “Effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic.”
What Did Anthropic Say?
On Friday evening, the company said that it had not heard anything directly from the military or the White House "on the status of our negotiations".
It laid out its reasoning for refusing the demands of the Pentagon. The startup said this was the first time such a designation had been used against an American company.
“We believe this designation would both be legally unsound and set a dangerous precedent for any American company that negotiates with the government,” Anthropic said.
It further added, “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.”
Anthropic explained that Hegseth's supply chain risk designation will only apply to the use of Claude in Department of War contracts, and other operations will remain unaffected.
What Happens Next?
Anthropic's decision to go to court makes it one of the few companies to directly challenge the Trump administration in its second term.
Hegseth's designation is likely to benefit Elon Musk's chatbot, Grok. The Pentagon plans to give the Claude rival access to classified military networks. The move could serve as a warning to Google and OpenAI, who also have contracts with the US military to supply their AI tools.
OpenAI CEO Sam Altman sided with Anthropic in an interview with CNBC and questioned the Pentagon's "threatening" move, indicating that OpenAI and most of the AI sector have the same red lines.
Hours later, he stated OpenAI has inked a deal with the Pentagon to use its models in the federal agency's classified network.
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