Pentagon’s attempt to strong-arm Anthropic rouses resistance and reflection in Silicon Valley

AI powerhouse Anthropic’s battle with the Pentagon has sparked some soul-searching in Silicon Valley that could reshape the tech industry’s complicated relationship with war and the White House.

Anthropic is the San Francisco-based startup behind chatbot Claude and some of the most powerful AIs on the market. In his talks with the military, he demanded guardrails on how his technology would be used.

The military said it refused to be beholden to one company and pushed back, labeling Anthropic as a threat akin to a hostile foreign power and banning it from some government contracts.

Tech leaders have quietly backed Anthropic, saying AI isn’t ready for some weapons and that powerful armaments companies are inefficient and undemocratic. President Trump called Anthropic a bunch of “leftist nut jobs.”

How this showdown plays out will affect not only Anthropic’s thriving business, but also the way tech giants and other companies work with an administration that attacks insurgents, said Alan Rozenshtein, an associate professor at the University of Minnesota Law School.

“On the one hand, it could cause the government to make other Silicon Valley vendors more accommodating so that Anthropic is not treated the way it was treated,” he said. “On the other hand, it could lead to more companies avoiding doing business with the government to avoid the risk of something like this happening to them.”

Southern California has become a hub for defense technology startups in recent years as some tech pioneers have become more comfortable developing weapons. With a long history in defense, the company has the factories, engineers and aerospace expertise to turn venture capital financing and military demand into weapons, satellites and other advanced systems.

The fallout from Anthropic’s showdown with the Trump administration will help determine local winners and losers in the industry for years to come.

While many of the major players in the tech world have been reluctant to join the fight in a high-profile way, positions on different sides are emerging in a case Anthropic is pursuing to get off the Pentagon’s blacklist.

Anthropic filed the case in the U.S. District Court for the Northern District of California and filed a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit on March 9. The company is asking the court to overturn its designation as a “supply chain risk” and block the Trump administration from enforcing the government’s ban on its technology.

“The ramifications of this case are huge,” he said of Anthropic’s lawsuit. “The federal government has retaliated against a leading AI developer for violating the Constitution and laws of the United States by adhering to its protected viewpoint on AI safety and the limitations of its AI models, an issue of great public importance.”

Some of Anthropic’s biggest concerns are that its technology could be used for government surveillance or autonomous weapons. They want assurances in the text of their contracts that artificial intelligence will not be used for these purposes. Although the government said it would not use the technology for these purposes, it could not provide Anthropic with the assurance it wanted.

Tech industry groups, Microsoft and Google, and OpenAI employees supported Anthropic in its legal fight against the Trump administration and added their own opinions to the lawsuit.

On Tuesday, U.S. government lawyers said in a court filing that the Defense Department was beginning to wonder whether Anthropic could be trusted.

“If Anthropic – in its sole discretion – feels that its corporate ‘red lines’ have been crossed, Anthropic may seek to disable its technology or preemptively alter the behavior of its model during or during ongoing combat operations,” the government said in the filing.

The Ministry of Defense and Anthropics declined to comment.

The tech industry has a long and complicated history of working with the military. In the 1960s, the Department of Defense developed ARPAnet, a precursor to the internet, to help secure military and government computers.

For much of this century, big tech companies and their investors have often tried to avoid developing or promoting things that help spy on or kill people. Google, once known for its slogan “Don’t be Evil,” did not renew its controversial Pentagon contract Project Maven in 2018 after thousands of workers protested concerns that artificial intelligence could be used to analyze drone surveillance footage.

This has changed in recent years as more money is made from technical repairs of military problems.

Benjamin Lawrence, senior principal analyst at CB Insights, said advances in artificial intelligence and major events such as Russia’s invasion of Ukraine in 2022 have led to a surge in venture capital investments in defense technology.

“This has caused a huge shift with many traditional investors looking at defense technology in a more positive light because you have a sovereign democratic nation that has been invaded,” he said.

The world’s most powerful tech companies are partnering with defense tech startups and securing government contracts.

Google is offering AI tools to civilians and military personnel for unclassified work. The Department of Defense also awarded a $200 million contract to Google Public Sector, a division that works with government agencies and educational institutions to accelerate AI and cloud capabilities.

The industry’s allegiance to the White House and its military ambitions were strengthened with the advent of the second Trump administration. Many of the tech world’s top executives support and advise Trump.

But the recent strong arming of one of the thought leaders of the AI ​​revolution has given many pause. Some of the resistance reflects an earlier period when the tech industry was suspicious of how governments would use innovations.

The tech industry finds itself in a difficult situation after Anthropic’s conflict with the Pentagon. The public controversy escalated further in late February when Trump attacked Anthropic and ordered government agencies to stop using its technology. Its management called Anthropic a “supply chain risk,” prompting the company to sue.

Trump’s actions could jeopardize hundreds of millions of dollars in contracts with private parties, according to Anthropic’s lawsuit. Federal agencies began canceling contracts.

Last week, tech industry groups such as TechNet, whose members include Anthropic, Meta, OpenAI, Nvidia, Google and other major companies, said in a joint briefing that blacklisting an American company “causes uncertainty across the broader industry.”

“Treating an American technology company as a foreign competitor rather than an asset has a chilling effect on U.S. innovation and further discourages China’s efforts to export its own government-backed artificial intelligence technology,” the summary said.

Microsoft also backed Anthropic, urging the court to temporarily block Trump from blacklisting the AI ​​company. Labeling Anthropic as a supply chain risk means Microsoft and other government suppliers will have to use “significant resources” to determine how excluding Anthropic will affect their contracts.

The U.S. government said in its filing that its concerns about Antropik focused on his behavior and had nothing to do with his speech. However, Anthropic and the tech industry say this move will hurt their business.

In addition to Trump’s harsh criticism of the company, Defense Secretary Pete Hegseth accused Anthropic of providing a “master class in arrogance and betrayal.”

Anduril founder Palmer Luckey supported the Pentagon’s stance, stating that elected officials, not corporate executives, should be the ones making military decisions. Anthropic disagreed, stating in a blog post that it “understands that military decisions are made by the War Department, not private companies.”

As this battle continues, some experts say Anthropic will likely have the upper hand in court.

Anthropic said in its lawsuit that the Trump administration violated the law on labeling a company as a supply chain risk and that the company did not have ties to an “enemy” of the United States such as China or Iran.

Anthropic also said the Trump administration retaliated against the company for its speech and other protected activities, violating the 1st Amendment.

“They’re just attacking,” said Rozenshtein of the University of Minnesota Law School. “I think that’s largely what it is.”