Anthropic filed a lawsuit on Monday seeking to prevent the U.S. Department of Defense from placing the artificial intelligence company on a national security blacklist, intensifying a dispute between the startup and the Pentagon over restrictions on how its technology can be used.
The lawsuit, filed in federal court in California, argues that the Pentagon’s designation is unlawful and violates the company’s constitutional rights, according to Reuters. Anthropic asked the court to overturn 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 in the filing.
The legal challenge follows a decision last week by the Pentagon to impose a formal supply-chain risk designation on Anthropic. The move limits the use of the company’s technology in certain government systems and operations. According to Reuters, a source said the technology had been used in military operations related to Iran.
Defense Secretary Pete Hegseth issued the designation after Anthropic declined to remove safeguards in its AI systems that prohibit their use for autonomous weapons or domestic surveillance. Negotiations between the Pentagon and Anthropic over those limitations had grown increasingly tense over several months, Reuters previously reported.
Anthropic officials said the lawsuit does not prevent the company from reopening discussions with the U.S. government or pursuing a settlement. The company has indicated it does not want a prolonged confrontation with federal authorities. The Pentagon declined to comment on the lawsuit. Last week, however, a Pentagon official said the two sides were no longer in active talks, according to Reuters.
The designation threatens a significant portion of Anthropic’s government business and could influence how other AI developers set conditions on military use of their systems. Despite the dispute, Anthropic CEO Dario Amodei said last week that the designation had “a narrow scope,” meaning companies could still use the firm’s tools for projects not connected to the Pentagon.
Related: Trump Administration Drafts Strict AI Contract Rules Amid Pentagon Dispute With Anthropic
President Donald Trump has also directed federal agencies to halt work with Anthropic. The administration announced a six-month phase-out period for existing engagements with the company, whose investors include Alphabet’s Google and Amazon.com, per Reuters.
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Reuters reported that Anthropic’s backers have been working to limit the damage from the growing conflict with the Pentagon.
The administration’s actions followed months of negotiations about whether Anthropic’s internal policies could restrict military operations. Amodei met with Hegseth shortly before the decision was announced in an attempt to reach an agreement, according to Reuters.
Pentagon officials have argued that decisions about how artificial intelligence can be used in national defense should be governed by U.S. law rather than by the policies of private companies. The Defense Department has said it requires full flexibility to deploy AI for “any lawful use,” warning that restrictions like Anthropic’s could endanger American lives.
Anthropic has countered that even advanced AI systems remain unreliable for fully autonomous weapons and that using them in such roles could be dangerous. The company has also drawn a firm line against domestic surveillance of Americans, saying such use would violate fundamental rights.
Following the Pentagon’s announcement, Anthropic said the designation lacked legal grounding and could create a troubling precedent for technology companies negotiating with the government. The company also stated it would not be swayed by “intimidation or punishment,” and Amodei confirmed last week that Anthropic planned to challenge the decision in court.
Amodei also issued an apology after an internal memo was published by the tech news outlet The Information. In the memo, written last Friday, Amodei said Pentagon officials disliked the company partly because “we haven’t given dictator-style praise to Trump.”
The Defense Department has expanded its relationships with AI developers over the past year, signing agreements worth up to $200 million each with several major firms, including Anthropic, OpenAI and Google, according to Reuters.
Shortly after the Pentagon moved to blacklist Anthropic, Microsoft-backed OpenAI announced a deal to integrate its technology into the Defense Department’s network. OpenAI CEO Sam Altman said the company and the Pentagon share principles that support human oversight of weapons systems while opposing mass surveillance of Americans.
Source: Reuters
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