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Pentagon's AI Ban on Anthropic Sparks Legal Battle and Industry Backlash

A high-stakes legal fight erupts as Anthropic challenges the Pentagon's controversial AI ban. Tech giants and free-speech advocates rally behind the company.

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4 min read
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The image shows two people engaged in a fierce battle, with the words "The Battle of Copyright" written in bold lettering above them. The two people appear to be in the midst of a heated argument, with one person's arm raised and the other's arm bent in a defensive stance. The background is a deep blue, with a few stars twinkling in the night sky, and the text is written in a bright yellow font, emphasizing the intensity of the fight.

The Pentagon earlier this month labeled the artificial intelligence company a "supply-chain risk," an unprecedented designation against a United States company that bars department employees and contractors from using its products, like the popular AI assistant Claude.

Anthropic has sued to block the designation, calling it a retaliatory move that violated the company's First Amendment and due process rights.

Ahead of the pivotal hearing, dozens of tech employees, former military officials, free speech advocates and legal scholars weighed in on the case by filing amicus briefs on Anthropic's motion, overwhelmingly siding with the company in pushing back against the Pentagon.

Former service members

A group of nearly two dozen high-ranking former US Military, Navy, Coast Guard and Air Force personnel filed a brief arguing against the Pentagon and calling for relief from the court.

  • The group, which included several former secretaries of the Navy and Air Force, argued that a "military grounded in the rule of law is weakened, not strengthened, by government actions that lack legal foundation," and that designating an American company a security risk was an "extraordinary and unprecedented" step that required "firm grounding."
  • The group said at stake in the case was the "misuse of powerful national security authorities by civilian political leadership" as "retribution against a private company that has displeased the leadership," and said they were "gravely concerned" that the Pentagon had exceeded its authority by issuing a designation "in an unprecedented manner that appears disconnected from the purposes" outlined in relevant law.
  • The group argued that the Pentagon's designation "risks the long-term viability of critical public-private partnerships" between it and technology companies, which could "detract from military readiness and operational safety by harming the military's ability to equip U.S. servicemembers with the latest, most effective technology."

Google and OpenAI employees

Nearly 50 Google and OpenAI staffers, writing in their personal capacities, filed a brief siding with Anthropic over the federal government.

  • This collection of engineers, technical staff, scientists and researchers wrote that the Pentagon acted "recklessly" by invoking the designation to "punish" Anthropic rather than simply canceling their contract and seeking out another AI company to partner with.
  • If allowed to stand, they wrote, the decision could harm US competitiveness on AI as it would "chill open deliberation in our field about the risks and benefits of today's AI systems."
  • The group said they supported Anthropic's bid to draw "red lines" and build guardrails against the use of its technology to fuel mass surveillance or power autonomous weapons. "The best currently available AI systems cannot safely or reliably handle fully autonomous lethal targeting, and should not be available for domestic mass surveillance of the American people," they wrote.

Free-speech advocates

A coalition of groups that champion free expression and First Amendment rights filed in support of Anthropic. They included The Foundation for Individual Rights and Expression (FIRE), the Electronic Frontier Foundation (EFF) and the Cato Institute.

  • The brief excoriated the Pentagon's designation as a "potentially ruinous sanction threatens not only Anthropic's business but also that of its partners and customers," and that if left unchecked "imposes a culture of coercion, complicity, and silence, in which the public understands that the government will use any means at its disposal to punish those who dare to disagree.
  • "The Pentagon's temper tantrum is a textbook violation of Anthropic's First Amendment rights," the groups wrote, because it requires the company to "make a trade on a core freedom of expression." The groups added that the Defense Department has freely admitted its decision was retaliatory, and thus an attempt to coerce it into compliance.
  • The groups argued that Anthropic's choices around the output of its Claude product are "expressive" and thus protected under the First Amendment. "Requiring Claude to express ideas that Anthropic does not wish to express is classic compelled speech, which lies in the heartland of First Amendment's prohibitions," they wrote.

Microsoft

Tech giant Microsoft, which is itself a major US government contractor and has a strategic partnership with Anthropic, sided with the company in calling for a "pause" on the designation.

  • Microsoft argued that a pause would "enable a more orderly transition and avoid disrupting the American military's ongoing use of advanced AI," and prevent itself and other tech companies from acting "immediately" to change arrangements for products or services offered to the Pentagon.
  • The company argued that the "unprecedented order" between the two parties would nevertheless have "broad negative ramifications for the entire technology sector and American business community," since going forward all companies dealing with the Pentagon would be "forced to account for a new risk in their business planning."
  • Microsoft argued the best outcome would be a "negotiated resolution" between the two parties that did not set a broader legal precedent. There is reason to believe a negotiated resolution is possible here," the company wrote, pointing to the fact that the Pentagon was able to separately come to terms with OpenAI.

Law professor Alan Rozenshtein

The Minnesota law professor and Lawfare editor, whose analyses of the spat between Pentagon and Anthropic has been widely cited, filed a brief in favor of Anthropic.

  • Rozenshtein argued that Hegseth's order "far exceeds his limited statutory authority" to restrict the Defense Department's contracting, because Congress intended for it to be limited to prevent adversaries that might "sabotage, maliciously introduce unwanted function, or otherwise subvert" US government systems. "That threat model bears no resemblance to the circumstances of this case," he wrote.
  • He argued federal law "forecloses" the Pentagon's designation, including by largely targeting threats operating in secret against US interests, not vendors operating in "good faith" negotiations with the government.
  • The law governing these decisions was intended to "confront a fundamentally different problem, and stretching those authorities to cover a dispute with a domestic software provider would exceed their text and purpose," he wrote.

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