Secretary Pete Hegseth. (Evan Vucci/Associated Press)
March 5, 2026 2:12 PM, EST
The Pentagon said it has formally notified Anthropic PBC that it has determined the company and its products pose a risk to the U.S. supply chain, according to a senior defense official, escalating a dispute over artificial intelligence safeguards.
“DOW officially informed Anthropic leadership the company and its products are deemed a supply chain risk, effective immediately,” the official told Bloomberg News on March 5, using an acronym for the Department of War, the name that Defense Secretary Pete Hegseth now favors for the Department of Defense.
Spokespeople for Anthropic had no immediate comment. The defense official didn’t say when or by what means the Pentagon informed the company.
Anthropic has previously vowed to challenge in court any supply chain risk designation by the Pentagon.
The Pentagon’s finding threatens to disrupt both the company and the military, which has relied heavily on Anthropic’s software. Until recently, Anthropic provided the only AI system that could operate in the Pentagon’s classified cloud. Its Claude Gov tool has become a favored option among defense personnel for its ease of use.
“It’s a good capability” and removing it is “going to be painful for all involved,” said Lauren Kahn, a senior research analyst at Georgetown University’s Center for Security and Emerging Technology.
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
Anthropic CEO Dario Amodei had been negotiating for weeks with Emil Michael, undersecretary of defense for research and engineering, to hammer out a contract governing the Pentagon’s access to Anthropic’s technology.
But talks broke down last week after the startup demanded assurances that its AI wouldn’t be used for mass surveillance of Americans or autonomous weapons deployment. Hegseth then declared Feb. 27 in a post on X that Anthropic posed a supply chain risk, a designation typically reserved for US adversaries.
It wasn’t immediately clear what authority the Pentagon was using to classify the company as a supply-chain threat. In its statement last week responding to Hegseth’s social media post, Anthropic indicated that it expected the move to be eventually carried out via section 3252 of the law governing the U.S. armed forces.
“From the very beginning, this has been about one fundamental principle: the military being able to use technology for all lawful purposes,” the defense official said March 5. “The military will not allow a vendor to insert itself into the chain of command by restricting the lawful use of a critical capability and put our warfighters at risk.”
The move comes as the U.S. military is relying on Claude in its Iran campaign, where American armed forces are turning to a range of AI tools to quickly manage enormous amounts of data for their operations.
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Maven Smart System, produced by Palantir Technologies Inc. and widely used by military operators in the Middle East, counts Anthropic’s Claude AI tool among the large language models installed on the system, according to people familiar with the matter, who said Claude is working well and has become central to U.S. operations against Iran and to accelerating Maven’s AI efforts.
Now valued at $380 billion, Anthropic is on track to generate annual revenue of almost $20 billion, a projection based on current performance, more than doubling its run rate from late last year. The Pentagon dispute, however, has muddied the outlook for the company.
Any long-term impact from the Pentagon’s declaration on Anthropic’s sales to enterprise customers — which has long been its core business — remains to be seen. In the meantime, it’s gaining traction with everyday users. Anthropic’s main app recently topped Apple Inc.’s download charts, reflecting a surge of support for the company.
