Tech industry group expresses 'concern' to Pete Hegseth over supply chain risk label

In a move that highlights rising tensions within the tech industry, a coalition of major companies, including Nvidia, Google, and Anthropic, has voiced its concerns to Defense Secretary Pete Hegseth regarding the recent classification of a U.S. company as a supply chain risk. The Information Technology Industry Council (ITI), which penned the letter, did not specifically mention Anthropic, yet the company was recently tagged with this designation after a procurement disagreement with the Department of Defense. The ITI's letter, sent on Wednesday, expressed unease over reports that the Department of War is contemplating imposing this controversial label in response to the ongoing procurement dispute. The organization, which also counts Microsoft, Apple, and Amazon among its members, emphasized that contract disputes should ideally be settled through negotiations or by the Department choosing alternative suppliers through established procurement avenues. "Emergency designations like supply chain risk should be reserved for actual emergencies and typically apply to foreign adversaries," the ITI stated. This sentiment follows Hegseth's announcement on social media that the Pentagon would label Anthropic as a "supply chain risk to national security." This declaration came shortly after President Donald Trump mandated that all U.S. government agencies cease using Anthropic's technology, raising alarms within the tech community. The ITI's correspondence referenced established legal frameworks, such as the Federal Acquisition Supply Chain Security Act of 2018, which aims to safeguard federal information systems from potential risks. It further highlighted the procedural protections afforded to private companies, including the right to notice and an opportunity to respond before any such designation is finalized. Anthropic, which secured a $200 million contract with the DoD earlier this year, has been advocating for assurances that its technology would not be utilized for autonomous weaponry or widespread surveillance of U.S. citizens. The Pentagon, however, countered this request, insisting that the military retains the right to use the platform for all lawful purposes. In a statement, Anthropic expressed its profound disappointment over the decision, characterizing the supply chain risk designation as a historic and unprecedented action against an American company. OpenAI CEO Sam Altman also weighed in, noting that his organization had successfully negotiated terms with the Defense Department. He cautioned that enforcing the supply chain risk label on Anthropic could have detrimental effects on both the industry and national interests, as well as on Anthropic itself.