US Defense Secretary Pete Hegseth has designated AI company Anthropic as a “supply chain risk” to national security, following direct orders from President Donald Trump. This escalation stems from failed confidential talks between the Pentagon and Anthropic, where the company insisted on strict limits for its Claude AI model, including bans on mass domestic surveillance and fully autonomous weapons. A CBS News video report highlighted Politico journalist Brendan Bordelon’s analysis of this clash as a major blow to the AI sector.
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Dispute Origins: AI Military Use Restrictions
Anthropic, the first frontier AI firm to deploy its Claude model on the Pentagon’s classified networks since June 2024, has provided support to the US military. However, it drew firm lines at two uses: large-scale surveillance of Americans and fully autonomous weapons. The Pentagon demanded access for “all lawful purposes,” but Anthropic argued current AI lacks reliability for such high-stakes roles.
CEO Dario Amodei stated, “AI can undermine democratic values in certain uses, and today’s technology cannot safely operate autonomous weapons.”
The military cited federal laws and internal policies, but Anthropic dismissed these as containing “legal loopholes.”
Trump and Hegseth’s Harsh Response
President Trump posted on Truth Social, directing all federal agencies to immediately cease using Anthropic’s technology with a 6-month phase-out. He warned of “civil and criminal consequences” using full presidential powers if the company doesn’t comply. Hegseth then announced on X that no military contractors, suppliers, or partners can engage in business with Anthropic.
Hegseth labeled the company “sanctimonious” and “arrogant,” accusing it of seeking veto power over military decisions. He declared, “American warriors will not be hostages to Big Tech’s ideological stubbornness. This decision is final.”
Anthropic’s Retort: Legal Challenge Ahead
Anthropic issued a statement calling Hegseth’s designation “legally unsound” and unprecedented for a US company. It plans to challenge it in court, noting it only impacts DoD contracts, not general customers. “We want to keep supporting US troops but stand firm on surveillance and autonomous weapons,” the firm affirmed.
Industry Fallout: AI Sector on Edge
This feud signals risks for the AI industry, potentially reshaping Washington-tech ties. Thousands of Pentagon contractors face restrictions, with fears of “partial nationalization” looming. Forbes and Washington Post dubbed it an “attempted corporate murder.”
Legal and Tech Implications
Under 10 USC 3252, supply chain risk designations typically target foreign threats. Anthropic claims Hegseth overstepped authority. For Indian cyber law experts, this case highlights AI guardrails balancing national security and privacy—relevant amid rising military AI debates here.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
