The US Secretary of Defense has designated an AI company as a “supply chain risk” after the company refused to remove guardrails around its technology.
Published March 18, 2026
President Donald Trump’s administration said in a court filing that the Pentagon’s blacklisting of Anthropic was valid and legal, and opposed high-stakes lawsuits by artificial intelligence companies challenging the decision.
The administration made the comments clear in a court filing on Tuesday.
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Secretary of Defense Pete Hegseth on March 3 designated Anthropic, the maker of the popular AI assistant Claude, as a national security supply chain risk after the company refused to remove guardrails for technology used in autonomous weapons and domestic surveillance.
According to the Trump administration’s filing, Anthropic says its claim that the U.S. government’s actions violate First Amendment speech protections is unlikely to succeed, arguing that the dispute stems from contract negotiations and national security concerns, not retaliation.
“The President has directed all federal agencies to terminate their business relationships with Anthropic only when Anthropic refuses to lift restrictions on the use of its products, a refusal that is not protected speech,” the administration’s legal filing states. “No one seeks to restrict Anthropic’s expressive activities,” the U.S. Department of Justice filing says.
Anthropic’s lawsuit in California federal court asks a judge to block the Pentagon’s decision while the trial proceeds. Some legal experts say the company appears to have a strong case for government overreach.
Anthropic said in a statement that it is reviewing the government’s submissions. “While seeking judicial review will not change our long-standing commitment to leveraging AI to protect national security, it is a necessary step to protect our business, customers, and partners,” the company said in a statement.
The White House did not respond to requests for comment.
Supply chain risk
President Trump supports Hegseth’s move to exclude Anthropic from limited military contracts. But executives say the move could damage the company’s reputation and cost it billions of dollars this year.
The designation came after months of negotiations between the Pentagon and Anthropic stalled, with Mr. Trump and Mr. Hegseth accusing the company of endangering American lives by restricting its use.
Anthropic disputes these claims and says AI is not yet safe enough to be used in autonomous weapons. The company said it opposes domestic surveillance in principle.
Anthropic said in its March 9 lawsuit that the “unprecedented and illegal” designation violates free speech and due process rights, as well as laws that require federal agencies to follow certain procedures when making decisions.
The Department of Defense separately designated Anthropic as a supply chain risk under separate legislation that could extend the mandate across the government.
Antropic is challenging the move in a second lawsuit in the Washington, D.C., Court of Appeals.
