American artificial intelligence company Anthropic sued the US Defense Department and other federal agencies on Monday, saying the Trump administration acted unlawfully by branding the AI company a supply chain risk and ordering agencies to stop using its tools.
The lawsuit opens a new phase in a fight over whether the government can force Anthropic to remove limits on how the military uses artificial intelligence.
Filed in federal court in California, the case challenges a Feb. 27 order that cut Anthropic off from federal work after talks with the Pentagon collapsed. Anthropic said the label is usually used for companies linked to foreign adversaries and called its use against a U.S. firm unprecedented.
The company is asking the court to block the designation and declare the government’s actions unlawful. It is not seeking monetary damages.
Anthropic challenges Pentagon’s AI blacklist
The dispute centers on two conditions Anthropic wanted in its defense contract. The company said its AI should not be used for mass surveillance of Americans or for autonomous weapons.
Pentagon officials said the military must be free to use the technology for all lawful purposes and could not let a private company set limits during a national security emergency, even as the department said it was not interested in those uses.
Anthropic said the administration went beyond its legal authority, denied the company due process, and retaliated against it for protected speech.
In its filing, the company said the blacklist put hundreds of millions of dollars in current and future contracts at risk and damaged its reputation. It also said the move could chill other companies from speaking publicly about AI risks.
Clash between Anthropic and the US Defense Department
A company spokesperson said Anthropic remains committed to supporting national security but turned to the courts to protect its business, customers and partners. The Defense Department declined to comment because of active litigation.
White House spokesperson Liz Huston said President Donald Trump would not let what she described as a woke technology company influence military operations and said the armed forces would follow the Constitution, not a company’s terms of service.
The clash followed a Feb. 24 meeting between Anthropic CEO Dario Amodei and Defense Secretary Pete Hegseth that failed to produce an agreement. Anthropic said it had tried to revise contract language and reach a compromise.
Instead, it said, the government responded with public attacks and a blacklist that also affected contractors and companies doing Pentagon work.
This week, Anthropic delivered a master class in arrogance and betrayal as well as a textbook case of how not to do business with the United States Government or the Pentagon.
Our position has never wavered and will never waver: the Department of War must have full, unrestricted…
— Secretary of War Pete Hegseth (@SecWar) February 27, 2026
AI researchers back Anthropic in court filing
Dozens of researchers from OpenAI and Google DeepMind later backed Anthropic in a court filing, saying limits on domestic mass surveillance and autonomous weapons are reasonable until stronger legal safeguards exist.
The case also deepened the split between Anthropic and the US Defense Department as OpenAI quickly secured a Pentagon deal and large partners said they would keep using Anthropic’s tools for commercial work outside defense projects.
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