Anthropic lawyer says the government is 'pressuring' companies to ditch the AI startup in favor of competitors

• Anthropic is suing the Pentagon after the US government essentially blacklisted the startup.
• The company said that the move has already damaged its business.
• Anthropic is seeking a temporary restraining order against the Defense Department.

Anthropic's lawyer said the US government is "pressuring" the startup's customers to go to rival AI providers amid an escalating fight between the Claude developer and the Department of Defense.

During a status conference on Tuesday, Michael Mongan, an attorney for Anthropic, said the Defense Department's decision to effectively blacklist the startup from working with the US military is bringing "real and irreparable harm" to the company each day.

Mongan said customers have begun "expressing doubt" about working with Anthropic and that the government has been on a pressure campaign to get Anthropic's customers to drop the provider and go to competing AI companies.

"We've had university systems and business-to-business companies that have switched to competing AI companies," Mongan said. "And this is all the predictable result of the defendant's actions and the uncertainty they've created, as well as the fact that defendants have been affirmatively reaching out to our customers and pressuring them to stop working with Anthropic and switch to other AI companies."

Last month, after contract negotiations with the AI startup fell apart, Defense Secretary Pete Hegseth announced that Anthropic was a "supply chain risk" and framed the move as extending beyond direct military work.

"Effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic," Hegseth said in an X post on February 27.

The scope of the supply chain risk label is in dispute. Microsoft previously told Business Insider that its lawyers concluded the company can still use Anthropic for non-military-related work. The company also filed an amicus brief, urging the federal court to temporarily block the government's supply chain risk designation.

The issue centers on Anthropic's stance that its frontier model, Claude, cannot be deployed for autonomous weapons and mass surveillance of US citizens. Defense officials have said in response that a private company cannot dictate what the military can and cannot do.

Anthropic CEO Dario Amodei said in a blog post on February 26 that the company could not accede to the government's demand for unrestricted, lawful use of its model. A day later, Hegseth formally designated Anthropic a supply chain risk.

Anthropic sued the government on Monday, seeking a temporary restraining order to continue doing business with the government as the case proceeds. The company said in the suit that the Defense Department did not provide adequate grounds to label it a national security risk.

In addition, the company said the designation has never been applied to an American company and that the move was retaliatory, violating the company's First Amendment rights to express its views on AI safety and limitations.

The fallout from Anthropic's blacklisting has been swift, according to legal filings.

Krishna Rao, Anthropic's chief financial officer, said in a declaration filed on Monday that the DoD had contacted several "portfolio companies about their use of Claude" and that those clients have "grown worried and uncertain" about their ability to use the model.

The CFO said the government's action could reduce Anthropic's 2026 revenue by "multiple billions of dollars."

Spokespeople for Anthropic and the Pentagon, as well as Anthropic's lawyer, did not respond to a request for comment.