AI firm Anthropic sues Trump admin over ‘supply chain risk’ label

Anthropic, the creator of the AI software Claude, has sued the Trump administration for what it says is an “unlawful campaign of retaliation” after the company refused to allow the military unrestricted use of its technology.

Anthropic sued multiple government agencies and officials in a California federal court on Monday, asking the court to reverse the Department of Defenses decision to label the company a “supply chain risk.”

It also seeks to overturn US President Donald Trump‘s directive to federal employees to stop using Claude. Anthropic also filed suit in a Washington, D.C., appeals court to challenge the Defense Department’s decision.

“These actions are unprecedented and unlawful,” Anthropic argued. “The Constitution does not allow the government to wield its enormous power to punish a company for its protected speech.”

Claude “never tested” for uses wanted by Pentagon

Last month, Defense Secretary Pete Hegseth, who is named in the lawsuit, moved to label Anthropic as a supply chain risk, which was finalized on March 3, meaning any person or business doing business with the military cant also deal with Anthropic.

It is the first time an American company has been designated a supply chain risk, a label usually reserved for companies tied to foreign adversaries.

The US government and the Pentagon have used Anthropic since 2024, and the companys technology is the first AI to be deployed for use in classified work.

Anthropic said that Hegseth‘s decision came after he demanded the company “discard its usage restrictions altogether,” but Anthropic maintained its technology shouldn’t be used for lethal autonomous warfare and mass surveillance of Americans, clauses that were always part of its government contracts.

An excerpt from Anthropics suit claiming US President Donald Trump ordered federal agencies to stop using its tech after the government had agreed to its terms. Source: CourtListener

“Anthropic has never tested Claude for those uses,” the company said in its lawsuit. “Anthropic currently does not have confidence, for example, that Claude would function reliably or safely if used to support lethal autonomous warfare.”

Anthropics lawsuit also named the US Treasury and its secretary, Scott Bessent, the State Department, and Secretary of State Marco Rubio, along with 17 other government agencies and officials.

A group of more than 30 AI engineers and scientists from OpenAI and Google, including the latters chief scientist, Jeff Dean, also filed a legal brief in support of Anthropic on Monday.

“If allowed to proceed, this effort to punish one of the leading U.S. AI companies will undoubtedly have consequences for the United States industrial and scientific competitiveness in the field of artificial intelligence and beyond,” the group wrote.