Will Anthropic sue the Defense Department after Anthropic was designated as “Supply Chain Risk”?

The NewYorkTimes.com reported that “Anthropic has said it will sue the Defense Department over the designation, which could prevent the start-up from doing business with the U.S. government.”  The March 5, 2026 article entitled " Pentagon Officially Notifies Anthropic It Is a ‘Supply Chain Risk’” (https://www.nytimes.com/2026/03/05/technology/anthropic-supply-chain-risk-defense-department.html?smid=nytcore-ios-share) included these comments:

The Defense Department has officially informed Anthropic that it has labeled the artificial intelligence company a “supply chain risk,” which could prevent it from doing business with the U.S. government.

In a statement posted to the internet on Thursday, Anthropic’s chief executive, Dario Amodei, confirmed that the company had received a formal letter from the Pentagon. As the company previously said, he vowed to fight the designation in court.

“We do not believe this action is legally sound,” he wrote.

The Defense Department is using Anthropic’s technology as U.S. military forces engage in a widening war against Iran, two people familiar with the technology said on the condition of anonymity.

Anthropic analyzes data and imagery collected by the United States, which helps the military decide where to deploy its forces or launch strikes.

In recent weeks, Anthropic has tussled with the Pentagon over how its A.I. could be used on classified systems. The Defense Department demanded that it be able to use Anthropic’s A.I. system for all lawful purposes, or it would cut the company off from government business.

Anthropic said it needed terms that would ensure that its A.I. technology would not be used for domestic surveillance of Americans or with autonomous lethal weapons. But the Pentagon insisted that a private company like Anthropic could not decide how its tools would be used in national security work.

The two sides failed to agree on terms by the Pentagon’s Friday afternoon deadline. After the deadline passed, Defense Secretary Pete Hegseth declared Anthropic a “supply-chain risk to national security” in a social media post. The designation is typically applied only to firms with ties to the government of China.

Very interesting development!!