Artificial intelligence company Anthropic filed a lawsuit Monday against the Donald Trump administration, challenging the Pentagon’s decision to designate the company and its products as a “supply chain risk” after negotiations over safety guardrails for the technology collapsed earlier this month.
The lawsuit, filed in federal court in California, argues that both the designation itself and Trump’s order directing all federal agencies to cease using Anthropic’s technology are “unprecedented and unlawful.”
The company is asking the court to overturn the Pentagon’s decision, warning that “the consequences of this case will be enormous.” Such supply chain risk classifications are typically reserved for foreign adversaries of the United States and effectively bar defense contractors from using a company’s products.
“The Constitution does not allow the government to wield its enormous power to punish a company for its protected speech,” the lawsuit states. “No federal statute authorizes the actions taken here.”
Anthropic’s lawyers said the company turned to the courts “as a last resort,” arguing that federal authorities “retaliated” against the firm for “adhering to its own protected viewpoint on a matter of immense public significance—the safety of artificial intelligence and the limitations of its own models.” The attorneys also said the Trump administration is attempting to “destroy” the economic value of Anthropic.
Anthropic, originally founded with a focus on technology safety, has since late 2024 been providing its systems to the Pentagon and intelligence agencies through a partnership with Palantir.
The company has sought to distinguish itself from competitors in the AI sector by advocating greater transparency and basic safeguards in the development of such technologies.
During negotiations with the U.S. Department of Defense, Anthropic outlined two “red lines”—the use of artificial intelligence for mass domestic surveillance and for autonomous weapons. The company said AI is not yet reliable enough to make life-and-death decisions while simultaneously expanding the scope of government surveillance.
The Pentagon rejected these arguments and insisted on the right to use artificial intelligence “for any lawful purposes.”
Negotiations ultimately collapsed earlier this month. Anthropic CEO Dario Amodei said the company could not “in good conscience” agree to the Pentagon’s terms. Last week, Defense Secretary Pete Hegseth notified the firm that it had been designated a supply chain risk, after which Trump ordered the immediate suspension of Anthropic products across all federal agencies, including its flagship Claude models.
The lawsuit names the Department of Defense, several federal agencies, and the Executive Office of the President as defendants.