Anthropic Officially Declared Supply Chain Risk by DOW
Anthropic CEO Dario Amodei confirmed last night that Anthropic has been officially notified of their supply chain risk status by the Department of War. The implication of this designation is that DOW contractors will not be able to use Claude in programs related to their DOW contracts. This means that companies like Amazon cannot use Claude models for their DOW specific programs, and companies like Palantir basically can’t use Claude models at all. Notably, this is much narrower (and in line with what is written in the actual laws) than the language Hegseth used in his original X post saying Anthropic was being declared a supply chain risk: “Effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic.” This interpretation would have forced major tech companies like Amazon, Microsoft, Google, and Nvidia, all of which have DOW contracts, to end their relationships with Anthropic. This would have killed Anthropic, as they would be entirely unable to get access to compute. Dario claims that the official statement that was delivered to them by the DOW clarifies that the narrow interpretation is correct.
“The vast majority of our customers are unaffected by a supply chain risk designation… The Department’s letter has a narrow scope, and this is because the relevant statute (10 USC 3252) is narrow, too. It exists to protect the government rather than to punish a supplier.” - Dario Amodei
Microsoft’s lawyers have also reportedly confirmed the narrow interpretation, and Microsoft is planning to continue serving Claude models across its various surfaces.
“Our lawyers have studied the designation and have concluded that Anthropic products, including Claude, can remain available to our customers — other than the Department of War — through platforms such as M365, GitHub, and Microsoft’s AI Foundry and that we can continue to work with Anthropic on non-defense related projects” - Microsoft Spokesperson
Where do things go from here? Dario’s statement seems to imply that Anthropic and the DOW are still, or were very recently, in talks about how to proceed. Notably, Claude models are being used in active operations in Iran in the role of helping to identify and prioritize targets. On the other hand, Emil Michael, the Under Secretary of War for Research and Engineering, posted last night in response to Dario’s statement, that there are no active negotiations. At this point, it doesn’t seem like the Pentagon wants to play ball with Anthropic. The DOW can’t accept Anthropic’s red lines, and Anthropic isn’t willing to change them. I expect the situation to continue evolving over time, but it seems, for now, like the first act is resolved: Anthropic is a supply chain risk, but is still up and fighting.