Anthropic Seeks Stay Order Over “Supply-Chain Risk” Label

The past few weeks have been tough for Anthropic. The California-based AI company and OpenAI rival Anthropic is now in a legal dispute with the U.S. Department of Defense (DoD). The reason? Well, Anthropic has denied the Pentagon’s demand for unrestricted access to its AI models in military settings.

In the negotiations table, the AI company had been seeking assurances from the Pentagon that its AI systems would not be used for certain activities, including mass surveillance of Americans or the deployment of autonomous weapons. After the company refused, the Pentagon handed the DoD deal to OpenAI and labeled Anthropic a “supply-chain risk” in the U.S. In return, Anthropic launched two lawsuits against the Pentagon, arguing that the labeling was “arbitrary” and “capricious.”

Anthropic challenges DoD “Supply-Chain Risk” label, seeks court stay order

Now, Reuters reports that Anthropic yesterday sought a stay order from the U.S. appeals court. An Anthropic lawyer’s statement in the court filing, seen by Reuters, read, “By Anthropic’s best estimate, for 2026, the government’s adverse actions risk hundreds of millions, or even multiple billions, of dollars in lost revenue.” Per the court filing, Anthropic has been contacted by over a hundred customers about the designation.

In a previous filing in a federal court in California, Anthropic’s lawyers argued that the decision to label the company a “supply-chain risk” threatens the company’s reputation and core First Amendment rights. That’s not all; they also accuse government officials of targeting one of the fastest-growing AI companies in the U.S. A few reports also hint that more than 30 employees from OpenAI and Google DeepMind are backing the company in the DoD lawsuit.

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OpenAI has been facing backlash following the deal with the Pentagon

OpenAI, which has been handed the DoD deal, has been facing massive backlash online. That’s not all; the situation inside its own walls isn’t good either. Many employees have reportedly protested the deal. Notably, the online backlash and “Cancel ChatGPT” movement appeared to have made OpenAI CEO Sam Altman acknowledge his mistake of rushing the deal, as it made the company look like an opportunist. The company is reportedly also in talks with the Pentagon to amend its deal to add clearer, ethical guardrails.

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