Anthropic may become the first AI company to be labelled a supply chain risk by the US due to a row between the firm and key US leaders.

US President Donald Trump has ordered all US federal agencies to stop using Anthropic’s technology after the firm allegedly refused to allow its AI tools to be used without any restrictions by the US military and other government branches.

The news came shortly before OpenAI, one of Anthropic’s main competitors, signed a deal with the US Department of War, though OpenAI said the deal would have restrictions on its technologies’ use cases.

Prior to the row with Anthropic, the European AI outfit voiced concerns on its technology’s potential use in surveillance or autonomous military operations. These concerns sparked pushback from the US government, with the US Secretary of Defence Pete Hegseth saying that he would “immediately” classify the AI firm a “supply chain risk.”

Hegseth alleged that Anthropic had agreed to “any lawful use” of its AI tools by the US department.

While Trump and Hegseth made their announcements on social media, so far Anthropic says it has yet to hear directly from the US concerning its contracts and negotiations.

Anthropic said it would challenge any such designations in court.

“No amount of intimidation or punishment from the Department of War will change our position on mass domestic surveillance or fully autonomous weapons,” the company said, saying that the designations would “both be legally unsound and set a dangerous precedent for any American company that negotiates with the government.”

Over the next six months, Anthropic’s tools will be phased out of US departments, with US officials saying that all companies that have contracts with the US military must also phase out the firm’s tech.

OpenAI’s deal with the US military will see it introduce similar restrictions that mired the US’s relationship with Anthropic.

OpenAI says that its technology cannot be used for high-stakes automated decisions, direct autonomous weapons systems, or mass domestic surveillance; these were the same issues that sparked Anthropic’s concerns.

“In our agreement, we protect our red lines through a more expansive, multi-layered approach. We retain full discretion over our safety stack, we deploy via cloud, cleared OpenAI personnel are in the loop, and we have strong contractual protections,” OpenAI said.

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Prior to the deal, OpenAI’s founder Sam Altman praised Anthropic’s stand against the US.

“I do not fully understand how things got here; I do not know why Anthropic did their deal with the Pentagon and Palantir in the way they originally did it,” Altman wrote in his company memo, as seen by the BBC.

“But regardless of how we got here, this is no longer just an issue between Anthropic and the DoW; this is an issue for the whole industry and it is important to clarify our stance.”

It will be revealing to see how OpenAI’s deal with the Department of War pans out considering its contracted protections against the same things that caused Anthropic to be designated a “risk.”

Any designation as a supply chain risk would be devastating to Anthropic’s position in the global AI market, especially if the myriad companies contracted with the US military also pull their contracts with the AI firm.

As OpenAI just reached a market value of $730 billion following a deal at the end of February, the new contact with the US is a strategic move by the AI firm that continues to lead in the AI race.