What happened
The US Pentagon is reviewing its relationship with Anthropic, placing a contract worth up to $200 million at risk. The dispute stems from Anthropic’s policy prohibiting its Claude AI models from use in lethal force, autonomous weapons, or surveillance. In response, the Pentagon is considering designating Anthropic a "supply chain risk," which would compel military contractors to certify they do not use its technology. DoD CTO Emil Michael stated the government will not permit AI companies to dictate military technology use.
Why it matters
AI labs must now price the commercial risk of their ethical guardrails when pursuing defence contracts. The Pentagon’s "supply chain risk" designation creates a formal penalty for firms that restrict military use cases, forcing a choice between revenue and safety principles. This move clarifies the terms of engagement for competitors like OpenAI, Google, and xAI, which are also seeking high-level clearance for their models. For procurement teams at defence contractors, the designation would force costly audits and tool replacement, as Anthropic's models are already integrated into classified systems.
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