Anthropic sues to block US Pentagon blacklisting over AI use restrictions

NEW YORK - Anthropic on March 9 filed a lawsuit to block the Pentagon from placing it on a national security blacklist, escalating the artificial intelligence laboratory’s high-stakes battle with the US military over usage restrictions on its technology.

The Pentagon on March 5 slapped

a formal supply-chain risk designation

on Anthropic, limiting use of a technology that a source said was being used for military operations in Iran.

Anthropic said in its lawsuit that the designation was unlawful and violated its free speech and due process rights.

The filing in federal court in California asked a judge to undo the designation and block federal agencies from enforcing it.

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

Defence Secretary Pete Hegseth designated Anthropic a national security supply-chain risk last week after the startup refused to remove guardrails against using its AI for autonomous weapons or domestic surveillance.

The designation poses a big threat to Anthropic’s business with the government, and the outcome could shape how other AI companies negotiate restrictions on military use of their technology, though the company's chief executive officer Dario Amodei clarified on March 5 that the designation had "a narrow scope" and businesses could still use its tools in projects unrelated to the Pentagon.

President Donald Trump has also

directed the government to stop working with Anthropic,

whose financial backers include Alphabet's Google and Amazon.com. Mr Trump and Mr Hegseth said there would be a six-month phase-out.

Reuters has reported that Anthropic's investors were racing to contain the damage caused by the fallout with the Pentagon.

Mr Trump and Mr Hegseth’s actions on Feb 27 came after months of talks with Anthropic over whether the company’s policies could

constrain military action

and shortly after Mr Amodei met Mr Hegseth in hopes of reaching a deal.

The Pentagon said US law, not a private company, would determine how to defend the country and insisted on having full flexibility in using AI for “any lawful use,” asserting that Anthropic’s restrictions could endanger American lives.

Anthropic said even the best AI models were not reliable enough for fully autonomous weapons and that using them for that purpose would be dangerous. The company also drew a red line on domestic surveillance of Americans, calling that a violation of fundamental rights.

After Mr Hegseth’s announcement, Anthropic said in a statement that the designation would be legally unsound and set a dangerous precedent for companies that negotiate with the government. The company said it would not be swayed by “intimidation or punishment,” and on March 5, Mr Amodei reiterated that Anthropic would challenge the designation in court.

He also apologised for an internal memo published on March 4 by tech news site The Information. In the memo, which was written Feb 27, Mr Amodei said Pentagon officials did not like the company in part because “we haven’t given dictator-style praise to Trump".

The Defence Department signed agreements worth up to US$200 million (S$255 million) each with major AI labs in the past year, including Anthropic, OpenAI and Google.

Microsoft-backed OpenAI announced a deal to use its technology in the Defence Department network shortly after Mr Hegseth moved to blacklist Anthropic.

Chief executive officer Sam Altman said the Pentagon shared OpenAI's principles of ensuring human oversight of weapon systems and opposing mass US surveillance. REUTERS