Defense contractors are expected to remove Anthropic’s AI systems from their supply chains after Donald Trump ordered a federal ban on the company, according to Reuters.
However, government contract attorneys say the Pentagon may lack the authority to force contractors to halt use of the technology outside federal contracts
The order follows a dispute between the Pentagon and Anthropic over restrictions built into the company’s Claude AI models.
Defense Secretary Pete Hegseth said the department would designate Anthropic a supply chain risk and warned that “no contractor, supplier or partner that does business with the United States military may conduct any commercial activity” with the company.
Jason Workmaster, a contract lawyer at Miller & Chevalier, described the move as a “highly aggressive position,” adding that courts could ultimately find the Pentagon lacks authority to impose such a restriction.
Analysis by Just Security suggests the secretary’s statement may exceed existing law. Under 10 U.S.C. § 3252, the Defense Department can exclude vendors from certain sensitive military systems but cannot broadly prohibit contractors from doing business with them.
Industry Fallout Begins
Anthropic said it will challenge the designation in court, saying it would be “legally unsound” and set “a dangerous precedent for any American company that negotiates with the government.”
Even if Anthropic ultimately prevails in court, the damage to its defense business may already be unfolding. Contractors that rely heavily on Pentagon work are moving quickly to remove the company’s AI tools from their supply chains.
Lockheed Martin said it would comply with the administration’s directive.
“We will follow the president’s and the Department of War’s direction,” the company said in a statement, adding that it does not depend on any single AI vendor “for any portion of our work.”
Saif Khan, a former National Security Council official in the Biden administration, said the move “may be the most draconian domestic AI regulation any government has ever issued,” adding that the department is “arguably treating Anthropic as a greater national security threat than any Chinese AI companies, none of whom they’ve designated supply-chain risks.”
