The Trump administration on Thursday announced that it is designating the artificial intelligence company Anthropic as a supply chain risk.

The Pentagon said in a statement that it "officially informed Anthropic leadership that the company and its products are deemed a supply chain risk, effective immediately."

The "supply-chain risk" label forces government contractors to discontinue use of Anthropic's AI chatbot Claude in their work for the US military.

"We do not believe this action is legally sound, and we see no choice but to challenge it in court,"  CEO Dario Amodei said in the statement.

Firms can, however, still use Anthropic's ⁠AI in other projects unrelated to the Pentagon, CEO Dario Amodei said in the statement. 

What is the dispute between Anthropic and the Pentagon about?

The move by the Pentagon comes a week after US President Donald Trump and Defense Secretary Pete Hegseth accused the company of posing a risk to national security.

The decision follows monthslong dispute over the safety restrictions embedded in Claude that limit its use in war-gaming scenarios.

Anthropic was ahead of its rivals in courting US national-security officials. But the ​company and the Pentagon have been embroiled in a dispute for ⁠months over how the military can use the company's technology on the battlefield.

Amodei said the Pentagon and Anthropic have ​talked about how Claude ‌might still work with the military without dismantling its safeguards.

However, in a post on X late Thursday, Pentagon Chief Technology Officer Emil Michael said there is no active Department of Defense negotiation with Anthropic.

What did the Pentagon and Anthropic say?

The Pentagon statement said, "This has been about one fundamental principle: the military being able to use technology for all lawful purposes. 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 putting our warfighters at risk."

Amodei countered that the narrow exceptions Anthropic sought to limit surveillance and autonomous weapons "relate to high-level usage areas, and not operational decision-making."

Edited by: Sean Sinico