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- Anthropic filed a lawsuit on Monday to stop the Pentagon's effective blacklisting.
- Defense Secretary Pete Hegseth previously ordered the Pentagon to stop doing business with the AI startup.
- In the legal filing, Anthropic said the order is already hurting its business.
Anthropic has filed suit to block the Pentagon's effective blacklisting of the company and its products.
On Monday, Anthropic sued the Department of Defense, the Executive Office of the President, Defense Secretary Pete Hegseth, and several other federal agencies. Last Thursday, the Pentagon said it had formally notified Anthropic that it would be labeled a supply chain risk, an unprecedented move against a US company.
Anthropic said the designation is putting business partnerships and contracts with other federal contractors "in jeopardy." According to the lawsuit, this is why the AI firm is suing to block the designation and to permanently prevent the federal government from taking similar actions.
"Current and future contracts with private parties are also in doubt, jeopardizing hundreds of millions of dollars in the near-term. On top of those immediate economic harms, Anthropic's reputation and core First Amendment freedoms are under attack," Anthropic's lawyers wrote in their complaint. "Absent judicial relief, those harms will only compound in the weeks and months ahead."
In the days since the designation was announced, Anthropic said some of its partners have begun raising concerns. As part of the suit, Anthropic provided a copy of Hegseth's letter, which said the designation was "effective immediately" but that the company could request a reconsideration within 30 days. The letter is dated March 3.
"For example, one federal contractor with whom Anthropic has built custom applications has indicated that it may suspend that work or even remove Claude from existing deployments," the lawyers wrote. "Other federal contractors are raising concerns, pausing collaborations, and considering terminating contracts."
The designation came at a pivotal time for Anthropic. Like its rival OpenAI, Anthropic remains a private company with an expected future public offering. In recent weeks, Claude, Anthropic's flagship AI chatbot, has upended financial markets with advancements that could disrupt a wide range of industries.
Defense Department officials took issue with Anthropic's refusal to allow the Pentagon full access to its AI models. Anthropic CEO Dario Amodei said such a request failed to take into account the necessary safeguards needed for the deployment of fully autonomous weapons and to prevent widespread domestic surveillance of Americans.
"I'm not going to call you to do something. It's not rational," Emil Michael, the Pentagon's R&D chief, told the "All-In" podcast last week of the department's talks with Amodei.
A spokesperson for the Pentagon said it's the department's policy not to comment on ongoing litigation.
Anthropic's lawsuit positions the company as a rare exception to the tech and AI industries' approach to the White House. Leading tech CEOs, including OpenAI's Sam Altman and Apple's Tim Cook, have gone to great lengths to foster goodwill with President Donald Trump and other leading Republicans in the nation's capital. Altman had previously urged the Pentagon not to apply the designation.
Anthropic also asked the federal courts to block Trump's directive that every federal agency cease using its products. In the days after Trump's order, which was posted on Truth Social, Treasury Secretary Scott Bessent said his department would stop using Anthropic's AI models.
A spokesperson for Anthropic said the company is continuing to "pursue every path toward resolution."
"Seeking judicial review does not change our longstanding commitment to harnessing AI to protect our national security, but this is a necessary step to protect our business, our customers, and our partners," the spokesperson said in a statement to Business Insider. "We will continue to pursue every path toward resolution, including dialogue with the government."