Anthropic requests emergency stay of supply chain risk designation in DC appeals case 

Anthropic has filed a request for an emergency stay on the Pentagon’s designation of its products as a supply chain risk, arguing Defense Secretary Pete Hegseth’s decision will “inflict escalating and irreparable harm” on the company. 

Lawyers for Anthropic argued in a Wednesday filing that the action was not a “reasoned agency decision” but came from a social media post by Hegseth designating the company a supply chain risk, a designation typically reserved for foreign adversaries. 

Hegseth, according to Anthropic, did not cite any statutory authority or provide any legal or factual explanation for the directive, allegedly violating due process protections. 

The designation came after the Pentagon and Anthropic clashed over the use of artificial intelligence for mass surveillance and autonomous weapons. Negotiations eventually fell apart earlier this month, prompting Hegseth to issue the designation and President Trump to order all federal agencies to stop using Anthropic’s products. 

“This authority has been used—at most—only once before, and never against an American company,” Anthropic’s lawyers said. 

Anthropic also filed suit in a California federal court earlier this week, and it requested a review from the D.C. federal appeals court. 

The AI firm, which makes the popular Claude chatbot, also alleged the federal government retaliated against the AI firm, citing Hegseth’s criticism of the company as its “sanctimonious rhetoric” and perceived “Silicon Valley ideology.” 

Anthropic’s lawyers said the comments and alleged retaliation present “exceptional circumstances,” favoring a traditional stay ahead of a judicial review. 

The Pentagon’s actions “reflect open retaliation for Anthropic’s protected speech and petitioning activity concerning the safe and responsible use of AI tools—matters of urgent public concern,” the filing stated. 

“The harms flowing from these unlawful executive actions are immediate, irreparable, and significant to Anthropic, and the government’s unlawful acts decidedly disserve the public interest,” it added. 

Earlier this week, lawyers for Anthropic’s California case warned the Pentagon’s actions could cost the AI firm billions of dollars in revenue.

Michael Mongan, an attorney for Anthropic, said more than 100 enterprise customers contacted Anthropic in recent days with concerns about working with the AI firm amid the public clash. Anthropic’s chief financial officer estimated harm to 2026 revenue could range from hundreds of millions of dollars to billions of dollars. 

Anthropic’s case has support from different players across the technology sphere, including technology giant Microsoft, dozens of workers from OpenAI and Google, and think tanks including the Foundation for American Innovation.