Anthropic sues to block Pentagon blacklisting over AI use restrictions

• Summary

• Companies

• Pentagon limits Anthropic’s tech use over AI restrictions for military operations

• Anthropic claims Pentagon’s actions violate free speech and due process rights

• Anthropic open to negotiations despite lawsuit

• Anthropic’s investors scramble to mitigate Pentagon fallout

NEW YORK, March 9 (Reuters) - Anthropic on Monday filed a lawsuit to block ​the Pentagon from placing it on a national security blacklist, escalating the artificial intelligence lab’s high-stakes battle with the U.S. military over usage ‌restrictions on its technology.

Anthropic said in its lawsuit that the designation was unlawful and violated its free speech and due process rights. The filing in federal court in California asked a judge to undo the designation and block federal agencies from enforcing it.

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“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.

The Pentagon on Thursday slapped a formal supply-chain risk designation on Anthropic, limiting use of a technology that a ​source said was being used for military operations in Iran. Defense Secretary Pete Hegseth designated Anthropic after the startup refused to remove ⁠guardrails against using its AI for autonomous weapons or domestic surveillance. The two sides had been in increasingly contentious talks over those limitations for months, Reuters first reported.

Anthropic ​officials said the lawsuit doesn’t preclude re-opening negotiations with the U.S. government and reaching a settlement. The company has said it does not want to be fighting with ​the U.S. government. The Pentagon said it wouldn’t comment on litigation. Last week, a Pentagon official said the two sides were no longer active talks.

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’s Google (GOOGL.O), opens new tab and Amazon.com (AMZN.O), opens new tab. Trump and Hegseth said there would be a six-month phase-out.

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

Trump and Hegseth’s actions on February 27 came after months of talks with Anthropic over whether the company’s policies could constrain military action and shortly after Amodei met with Hegseth in hopes of reaching a deal.

The Pentagon said U.S. law, not a private company, would determine how to defend the country and insisted on having full flexibility in using AI for “any lawful use,” asserting that Anthropic’s restrictions could endanger American lives.

Anthropic said 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 that a violation of fundamental rights.

After Hegseth’s announcement, Anthropic said in a statement that the designation would be legally unsound and set a dangerous ​precedent for companies that negotiate with the government. The company said it would not be swayed by “intimidation or punishment,” and ​on Thursday Amodei reiterated ⁠that Anthropic would challenge the designation in court.

He also apologized for an internal memo published on Wednesday by tech news site The Information. In the memo, which was written last Friday, Amodei said Pentagon officials did not like the company in part because “we haven’t given dictator-style praise to Trump."

The Defense Department signed agreements worth up to $200 million ⁠each with major ​AI labs in the past year, including Anthropic, OpenAI and Google.

Microsoft-backed (MSFT.O), opens new tab OpenAI announced a deal to ​use its technology in the Defense Department network shortly after Hegseth moved to blacklist Anthropic. CEO Sam Altman said the Pentagon shared OpenAI’s principles of ensuring human oversight of weapon systems and opposing ​mass U.S. surveillance.

Reporting by Jack Queen in New York; additional reporting by Deepa Seetharaman in San Francisco; Editing by Noeleen Walder, Lisa Shumaker, Daniel Wallis and Nick Zieminski

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Jack Queen

Thomson Reuters

Jack Queen covers major lawsuits against the Trump administration involving urgent questions of executive power and how their resolution could affect the law and the legal profession in the years to come. Previously, he covered criminal and civil cases against Trump during the interim of his presidential terms, including gavel-to-gavel coverage of his historic hush money trial in New York and his civil fraud trial, which ended in a half-billion-dollar judgment. Jack has also covered high-profile defamation cases including the Dominion Voting Systems’ lawsuit against Fox News, which settled for $787 million after intense pretrial litigation. Based in New York, he specializes in breaking news as well as analysis, explainers and other explanatory reporting.

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