Trump blacklists Anthropic: Here's what being a "supply chain risk" means
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President Trump and Defense Secretary Pete Hegseth in Palm Beach, Florida on Jan. 3. Photo: Jim Watson/AFP/Getty Images
Now that President Trump has instructed the Pentagon to blacklist Anthropic, the only AI model operating inside classified defense systems could take a massive financial hit.
The big picture: Being labeled a "supply chain risk" not only ends Anthropic's $200 million Defense Department contract, but it also forces anyone seeking to do business with the U.S. military to cut ties with the AI firm.
- Declaring a company a supply chain risk is a penalty typically reserved for businesses from adversarial countries, such as Chinese tech giant Huawei.
The latest: Defense Secretary Pete Hegseth on Friday said that, per Trump's directive, the Pentagon will designate Anthropic a supply chain risk to national security, emphasizing that "no contractor, supplier, or partner," that does business with the military can "conduct any commercial activity" with Anthropic.
- Anthropic has not said whether it plans to fight the administration's decision in court.
Context: Anthropic rejected the Pentagon's demands to lift all safeguards on the military's use of Claude, citing concerns about the platform being used for mass domestic surveillance or developing weapons capable of firing without human intervention.
- The Pentagon argued it has the authority to determine whether and how to use the tool and has demanded AI firms make their models available for "all lawful purposes."
Zoom out: The government hasn't yet said which specific law it's invoking to bar Anthropic, but declaring a company a supply chain risk is typically reserved for businesses operating out of adversarial countries.
- Listing an American company is extremely unusual.
Case in point: In 2024, the Commerce Department banned Kaspersky Lab, a U.S.-based subsidiary of a Russian company, from providing anti-virus services in America.
- The department said Kaspersky services "pose an undue or unacceptable national security risk" because of the Russian government's cyberwar capabilities and ability to influence the company's operations.
- Likewise, the Federal Communications Commission in 2020 designated Huawei Technologies a national security risk due to security flaws in its equipment and close ties to the Chinese government.
What they're saying: "The Leftwing nut jobs at Anthropic have made a DISASTROUS MISTAKE trying to STRONG-ARM the Department of War, and force them to obey their Terms of Service instead of our Constitution," Trump said Friday on Truth Social.
- "America's warfighters will never be held hostage by the ideological whims of Big Tech," Hegseth said on X. "This decision is final."
Go deeper: Pentagon blacklists Anthropic, labels AI company "supply chain risk"
