Anthropic vs Trump: AI firm sues Trump administration over Pentagon blacklist | DETAILS

Anthropic vs Trump: In a latest development, Anthropic sued the Pentagon on Monday to stop it from placing it on a national security blacklist, further escalating the artificial intelligence lab's high-stakes battle with the U.S. military over restrictions on the use of its technology.

On Thursday, the Pentagon has imposed a formal supply-chain risk designation on Anthropic, limiting the use of the technology that a source said was being used.

In its lawsuit, Anthropic said that the designation was illegal and violated its rights to free speech and due process. The filing in California federal court asked a judge to overturn the designation and prevent 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, as quoted by Reuters.

Defence Secretary Pete Hegseth last week labelled Anthropic a national security supply-chain risk after the startup refused to lift restrictions on using its AI for autonomous weapons or domestic surveillance.

The designation poses a big threat to Anthropic’s business with the government, and the outcome could shape how other AI companies negotiate restrictions on military use of their technology, though the company's CEO Dario Amodei clarified on Thursday that the designation had "a narrow scope" and businesses could still use its tools in projects unrelated to the Pentagon.

President Donald Trump has also directed the government to stop working with Anthropic, whose financial backers include Alphabet Inc.'s Google and Amazon. Trump and Hegseth said it would be phased out over six months.

Reuters has reported that Anthropic's investors were racing to contain the damage caused by the fallout with the Pentagon.

Trump and Hegseth took these steps on February 27 after months of discussions with Anthropic, which included discussing whether the company's policies could prevent military action, and Amodei met with Hegseth shortly thereafter in hopes of striking a deal.

The Pentagon stated that U.S. law, not a private company, should determine how to defend the country and insisted on complete flexibility in using AI for "any lawful use," saying Anthropic's restrictions could endanger American lives.

Anthropic stated that even the best AI models were not reliable enough for fully autonomous weapons and that using them for that purpose would be dangerous. The company also drew a red line on domestic surveillance of Americans, calling it a violation of fundamental rights.