Anthropic sued the Defense Department and other federal agencies on Monday over the Trump administration's move to designate it a supply chain risk and eliminate its use across the government, the latest chapter in a bitter dispute over the firm's powerful artificial intelligence model.

In a 48-page lawsuit filed in the U.S. District Court for the Northern District of California, Anthropic said efforts by the Pentagon and President Trump to punish the company were "unprecedented and unlawful."

"The Constitution does not allow the government to wield its enormous power to punish a company for its protected speech. No federal statute authorizes the actions taken here. Anthropic turns to the judiciary as a last resort to vindicate its rights and halt the Executive's unlawful campaign of retaliation," the filing said.

The company filed a separate, narrower suit asking the U.S. Court of Appeals for the District of Columbia to review the Pentagon's determination that it poses a risk to the supply chain. Federal law gives that court jurisdiction to review the finding.

The dispute stems from guardrails that Anthropic sought to impose on the military's use of Claude, the only AI model authorized for use on classified networks. The company sought assurances from the Pentagon that Claude would not be used for mass surveillance of U.S. citizens or to power lethal autonomous weapons. The Pentagon insisted that Claude be available for "all lawful use."

The two sides failed to resolve the conflict before a deadline of Feb. 27. Mr. Trump announced that he was ordering all federal agencies "to IMMEDIATELY CEASE all use of Anthropic's technology." Defense Secretary Pete Hegseth said Anthropic would be designated a supply chain risk and cut off from defense contracts, phasing out the technology over the course of six months. The Pentagon has continued to use Claude during the U.S. and Israeli war with Iran, CBS News reported last week.

Hegseth formally issued the supply chain risk designation last week. Anthropic's lawsuit asks the court to block Hegseth's order and declare it as "arbitrary, capricious, an abuse of discretion, and contrary to law." The company also asked the court to find that the president did not have the authority to order the rest of the government to cut ties with Anthropic.

"Anthropic's contracts with the federal government are already being canceled. Current and future contracts with private parties are also in doubt, jeopardizing hundreds of millions of dollars in the near-term," the company's lawsuit said. "On top of those immediate economic harms, Anthropic's reputation and core First Amendment freedoms are under attack. Absent judicial relief, those harms will only compound in the weeks and months ahead."

The lawsuit accused the administration of "seeking to destroy the economic value created by one of the world's fastest-growing private companies, which is a leader in responsibly developing an emergent technology of vital significance to our Nation."

"The Challenged Actions inflict immediate and irreparable harm on Anthropic; on others whose speech will be chilled; on those benefiting from the economic value the company can continue to create; and on a global public that deserves robust dialogue and debate on what AI means for warfare and surveillance," the suit continued. "There is no valid justification for the Challenged Actions. The Court should declare them unlawful and enjoin Defendants from taking any steps to implement them."

A Pentagon spokesperson declined to comment on pending litigation.

In a statement, White House spokeswoman Liz Huston said the president "will never allow a radical left, woke company to jeopardize our national security by dictating how the greatest and most powerful military in the world operates."

"Under the Trump Administration, our military will obey the United States Constitution — not any woke AI company's terms of service," she said.

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