Experience Stern | Faculty & Research

The Defense Department is threatening to designate the AI giant, Anthropic, a “supply chain risk”—a status normally reserved for foreign corporations. If it applies this designation, Anthropic will no longer be allowed to continue doing classified national security work. In suggesting this option, Secretary Hegseth is not trying to make a legal argument or applying a rational national security test. He is trying to make an example out of the company, a step that every business in America would do well to heed—and resist.

The stakes are significant. The Pentagon originally agreed to the terms of its contract with Anthropic, which included guardrails conditioning the applications of autonomous weapons use and mass surveillance of Americans, applications that pose serious ethical and moral concerns. But in January, Secretary Hegseth directed that all Defense Department contracts incorporate standard “any lawful use” language within 180 days. Hegseth has now given Anthropic CEO Dario Amodei a deadline of 5:01pm today to drop its safeguards or face the supply chain designation. That designation, usually reserved for companies from geopolitical adversaries like Russia or China, would require other companies doing business with the Pentagon to certify they do not use Claude in their workflows.

Anthropic serves eight of the ten largest U.S. companies and over 500 customers who spend more than $1 million annually on its products. While Hegseth’s threat is nominally focused on a $200 million government contract, it could prove devastating to Anthropic’s broader commercial business—an outcome that seems less like a national security measure than a calculated act of economic pressure.

Read the full Forbes article.
___
Michael Posner is the Jerome Kohlberg Professor of Ethics and Finance, Professor of Business and Society and Director of the NYU Stern Center for Business and Human Rights.