Pentagon Designates Anthropic Supply Chain Risk Over AI Military Dispute  Ravie Lakshmanan  Feb 28, 2026 National Security / Artificial Intelligence Anthropic on Friday hit back after U.S. Secretary of Defense Pete Hegseth directed the Pentagon to designate the artificial intelligence (AI) upstart as a "supply chain risk." "This action follows months of negotiations that reached an impasse over two exceptions we requested to the lawful use of our AI model, Claude: the mass domestic surveillance of Americans and fully autonomous weapons," the company said . "No amount of intimidation or punishment from the Department of War will change our position on mass domestic surveillance or fully autonomous weapons." In a social media post on Truth Social, U.S. President Donald Trump said he was ordering all federal agencies to phase out the use of Anthropic technology within the next six months. A subsequent X post from Hegseth mandated that all contractors, suppliers, and partners doing business with the U.S. military cease any "commercial activity with Anthropic" effective immediately. "In conjunction with the President's directive for the Federal Government to cease all use of Anthropic's technology, I am directing the Department of War to designate Anthropic a Supply Chain Risk to National Security," Hegseth wrote . The designation comes after weeks of negotiations between the Pentagon and Anthropic over the use of its AI models by the U.S. military. In a post published this week, the company argued that its contracts should not facilitate mass domestic surveillance or the development of autonomous weapons. "We support the use of AI for lawful foreign intelligence and counterintelligence missions," Anthropic noted. "But using these systems for mass domestic surveillance is incompatible with democratic values. AI-driven mass surveillance presents serious, novel risks to our fundamental liberties." The company also called out the U.S. Department of War's (DoW) position that it will only work with AI companies that allow "any lawful use" of the technology, while removing any safeguards that may exist, as part of efforts to build an "AI-first" warfighting force and bolster national security. "Diversity, Equity, and Inclusion and social ideology have no place in the DoW, so we must not employ AI models which incorporate ideological 'tuning' that interferes with their ability to provide objectively truthful responses to user prompts," a memorandum issued by the Pentagon last month reads. "The Department must also utilize models free from usage policy constraints that may limit lawful military applications." Responding to the designation, Anthropic described it as "legally unsound" and said it would set a dangerous precedent for any American company that negotiates with the government. It also noted that a supply chain risk designation under 10 USC 3252 can only extend to the use of Claude as part of DoW contracts, and that it cannot affect the use of Claude to serve other customers. Hundreds of employees at Google and OpenAI have signed an open letter urging their companies to stand with Anthropic in its clash with the Pentagon over military applications for AI tools like Claude. The standoff between Anthropic and the U.S. government comes as OpenAI CEO Sam Altman said OpenAI reached an agreement with the U.S. Department of Defense (DoD) to deploy its models in their classified network. It also asked DoD to extend those terms to all AI companies. "AI safety and wide distribution of benefits are the core of our mission. Two of our most important safety principles are prohibitions on domestic mass surveillance and human responsibility for the use of force, including for autonomous weapon systems," Altman said in a post on X. "The DoW agrees with these principles, reflects them in law and policy, and we put them into our agreement." Found this article interesting? Follow us on Google News , Twitter and LinkedIn to read more exclusive content we post. 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