Artificial intelligence (AI) company Anthropic sued the US Defense Department ("Department of War") on March 9 after the Department declared the company a "supply chain risk" and threat to national security.

Filed in the US District Court for the Northern District of California, the complaint alleges that the designation violated the Administrative Procedures Act (APA), First Amendment, and other constitutional provisions. Anthropic maintains that it has no ties to any adversary and has gone to great lengths to prevent adversaries from using its technology. The company asserts that the designation is arbitrary and capricious under the APA, and actually constitutes retaliation against Anthropic for exercising its free speech rights in deciding how to use its technology.

The US Code defines a supply chain risk as "the risk that an adversary may sabotage, maliciously introduce unwanted function, or otherwise subvert the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance" of an applicable product.

Anthropic asserts that the designation was a pretext for punishing the company for prohibiting its AI program "Claude" from being used for lethal warfare and mass surveillance. The public benefit corporation stated that it maintains these policies as part of its commitment to the public, and that it stands to lose millions from the "supply chain risk" designation in both government and private contracts. It is asking the court to declare the designation unlawful and prohibit the government from enforcing it.

The complaint cited posts by President Donald Trump and Defense Secretary Pete Hegseth that criticized the company for failing to change its policies. Hegseth stated that the administration should be able to use the technology for all lawful purposes. However, he and Department officials have refused to comment on the lawsuit, citing internal policy about commenting on active litigation.

Following the administration's dispute with Anthropic, OpenAI, one of Anthropic's competitors, struck a new deal with the department to supply its AI technology. Anthropic also filed another lawsuit challenging the designation in the US Court of Appeals for the District of Columbia under a different procedural method.

From JURIST, March 10. Used with permission.