Anthropic lawyer says the government is 'pressuring' companies to ditch the AI startup in favor of competitors

In a dramatic turn of events, Anthropic's legal representative claims the U.S. government is actively encouraging the startup's clients to pivot towards rival AI firms. This assertion comes in light of escalating tensions between the AI developer, known for its Claude model, and the Department of Defense (DoD). During a recent status conference, attorney Michael Mongan expressed concerns that the DoD's decision to effectively bar Anthropic from military collaborations is causing "real and irreparable harm" to the company on a daily basis. He noted that clients have started to exhibit hesitation in their dealings with Anthropic, as the government appears to be orchestrating a campaign to persuade them to switch to competing providers. Mongan highlighted that several university systems and business-to-business enterprises have already made the transition to rival AI companies. He attributed this shift to the uncertainty created by the government's actions and their direct outreach to Anthropic's clientele, pressuring them to abandon the startup. The situation escalated last month when Defense Secretary Pete Hegseth declared Anthropic a "supply chain risk" following the collapse of contract negotiations. Hegseth indicated that this classification extends beyond military applications, stating, "Effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic." The characterization of this supply chain risk is currently under scrutiny. Microsoft previously stated that its legal team determined the company could still engage with Anthropic for non-military-related projects. Furthermore, Microsoft submitted an amicus brief requesting a temporary halt to the government's supply chain risk designation. Complicating matters, Anthropic maintains that its Claude model is unsuitable for deployment in autonomous weapons systems or mass surveillance of U.S. citizens. Defense officials have countered, asserting that a private entity cannot dictate military operations. On February 26, Anthropic CEO Dario Amodei articulated in a blog post that the company could not comply with the government’s demands for unrestricted use of its technology. The following day, Hegseth officially classified Anthropic as a supply chain risk, prompting the company to file a lawsuit against the government. The suit seeks a temporary restraining order to allow Anthropic to continue its business with the government while the case unfolds. In its legal filing, Anthropic contends that the DoD has not provided sufficient justification for labeling it a national security threat. The company argues that this designation has never been applied to an American firm before and suggests that the move is retaliatory, infringing upon their First Amendment rights regarding discussions on AI safety and limitations. The repercussions of Anthropic's blacklisting have been swift, as detailed in legal documents. CFO Krishna Rao disclosed that the DoD has reached out to various "portfolio companies" regarding their use of Claude, leading to increased anxiety among clients about their future with the model. Rao indicated that such government intervention could potentially slash Anthropic's projected revenue for 2026 by "multiple billions of dollars."