U.S. appeals court upholds designation of Anthropic as supply chain risk (cnbc.com)

however anthropic also believes it is some kind of entity unto itself so it is not at all reliable.

Edit: I was wrong, the statement I linked is extremely dishonest and I was misled. The contract language lower down makes it clear that there are no "red lines", and OpenAI products can in fact be used for mass domestic surveillance, autonomous weapons, and social credit systems as long as they are considered legal.

[1] https://www.whitehouse.gov/presidential-actions/2025/02/endi...

I am pretty receptive to the "guns don't kill people, people kill people" argument, but we are taking a big leap from pen to llms/artificial intelligence. I am sympathetic to some of your other points, but I simply must reject this analogy.

No, they want to have rules on how the military used Anthropic AI.

Military would still be free to use OpenAI for the nasty stuff

It literally is a textbook definition, signed into US law:

“Supply chain risk,” means the risk that an adversary may sabotage, maliciously introduce unwanted function, or otherwise subvert the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance of a covered system so as to surveil, deny, disrupt, or otherwise degrade the function, use, or operation of such system (see 10 U.S.C. 3252).

To add onto what another commenter said, the pen analogy would be more like the manufacturer designing pens that stopped working when used to sign strike orders they disagreed with.

and trump admin originally went WAY further.

they originally said the pen, paper, table etc suppliers cant use anthropic even for products and subsidiaries that have nothing to do with their govt work; far beyond the supply chain of the pen (bomb). Mega Corp Pepsi Co Taco Bell Inc. LLC -> Staples > Pen Co. Sure pen co might be reasonabale. But telling taco bell they cant have claude help expand the baja-blast-radius is way too far. that would be just like secondary sanctions.

iirc there are 2 court cases. one ruled the original order was too broad and i think that still stands? so at least it's narrowed slightly to just the immediate supply chain?

but ianal

Hardly. I invite you to [read the opinion][1], particularly the great pains the majority spends on wrangling the definition of the word "manipulate."

Basically, [FASCSA][2] says to denote a company is a "supply chain risk," the govt has to meet the law's rigorous definition of what a "significant" risk actually is. That definition contains a catch-all "or otherwise manipulate the function" of the thing at hand (in this case, Claude) at the very end.

The govt's whole argument is "Well Anthropic has admitted that it can technically "manipulate" the response, therefore its a significant risk, therefore we designate it as such."

The dissent gives an analogy:

> A library might post a sign saying, “Do not shout, loudly talk on the phone, play music, or otherwise disturb others.” The common understanding would be that the rule bans bringing a boom-box into the reading room with the volume turned on high but not listening to music with headphones set at a modest sound level—even though both constitute “playing music.”

It is as if the govt argued "ah ah, Anthropic played music on their headphones, they broke the rules! We therefore have the authority to ban them" and the majority insanely agrees. It is clear to anyone with basic reading comprehension that the "manipulate" clause is supposed to continue the idea of malicious or subversive manipulation that the whole section entails. The hand-waving the majority uses gives the whole game away.

[1]: https://www.politico.com/f/?id=000001a0-d91e-d276-aff6-f97f3...

[2]: https://en.wikipedia.org/wiki/SECURE_Technology_Act

It’s clearly a punitive measure and has nothing to do with national security.

If a supplier uses Anthropic to develop a product, how does that pose a risk to the DoD or national security? The DoD can specify that a third party system can’t rely on Anthropic for DoD use without designating the company a supply risk. It was very clear that the administration was punishing the company for saying “no”.

Why couldn't excluding Anthropic be done a different mechanism than a supply chain risk. Why wouldn't this be a standard part of an agreement or a request and simply refuse to renew or cancel a contract rather than being designated a supply chain risk. If some third party contractor for an unrelated non military reason wanted to use Claude as part of their process, it seems perfectly allowable.

If this was a remotely standard way of operation, why did a fair amount of corporate America sign briefs concerned with the retaliatory aspect.

Parts of the action seemed wholly retaliatory as well since Pentagon officials certainly used it as a threat. Why can't a US company have views contrary to the policies of the US government? Certainly the US government is free to not do business with them, but this designation affects everybody doing any kind of indirect business with the US government which is a rather long chain. If this becomes a legitimate mechanism, how might we distinguish caring about a secure supply chain and simply wiping out a company that disagreed with a pro war attitude? If a machining shop had a policy against manufacturing weapons at all, could they be blocked from making server racks for Microsoft or perhaps light fixtures for the Department of Labor? There are plenty of areas that are, again, non military? I don't think it's credible to claim that Anthropic will deliberately sabotage operations.

Then the pen manufacturer hears about this and says “Our pens are not made of graphite and are not suitable to be used in nuclear reactors”, to which the reactor owner says “it’s fine, they fit in the graphite rod holes, and we’re just using until the next generation of pens come out which will do an even better job”, and then the pen manufacturer says “I’m not going to sell you any pens until you agree that they will be used only writing.”

Army: "OK, we will make sure not to use your AIs"

Antropic: "How dare you! We are suing! We intended for you to keep using it but do only what we want!"

Army: "..."

The analogy would be: “A customer agreed to a contract, and after running into a clause of the contract they no longer wanted to follow…canceled the contract unilaterally…which also violated the contract.”

I.e. Anthrophic cannot be trusted to honour a contract.

Who'd have guessed?

How can it be a textbook designation when designating a US company as a supply chain risk is unprecedented? So many actions under the Trump administration are unprecedented it starts to feel like the norm.

No other administration (Republican or Democrat) would do this. The DoD didn’t have a problem using Anthropic’s models during the raid on Venezuela and early on in the war with Iran.

Anthropic says to the former Fox News host it doesn’t want its models used for domestic surveillance or in kill situations without a human in the loop; all of a sudden they're a supply chain risk?

Seems obviously political.

Anthropic offered a contract, with certain conditions, as do all contracts everywhere; that's their purpose. The military did not want to agree to those conditions. If they had stopped there, and refused to sign the contract, all would be good. (It's actually worse, they did sign such a contract, and then decided they wanted the contract to say something different than it actually did. "Pray I don't alter it any further.")

> >The Department reasonably feared that Anthropic might manipulate Claude’s design to prevent it from performing national-security functions that the Department deems contractually authorized [emphasis mine]

That is speculation, and you can't call it a "textbook designation" without discussing whether there's a basis for that "reasonable fear". Again, that argument also works for declaring you have a reasonable fear that giving money to Anthropic will support pedophilia. We do not know the specifics, but I at least have heard of zero evidence that Anthropic would sabotage something they signed a legal contract for, and yet I have an abundance of evidence that this administration will use whatever contortions are necessary to pressure and punish those who interfere with it getting what it wants. It all hinges on the word "reasonable", and based on the evidence that is public, this specific fear seems more ridiculous than reasonable to me.

If the government somehow had a way to force Anthropic to sign a contract that it did not want to sign, then this fear might become more reasonable. The twist is that this supply chain risk designation is exactly that. If Anthropic now capitulated, the accusation of supply chain risk (eg from Anthropic employees acting alone) would be justified. So the only way Anthropic can reasonably be considered a supply chain risk is because it is accused of being a supply chain risk.

This is a textbook example, yes, but it's a textbook example of corruption and judicial capture.

> Though they'd probably put the DoD on the cybersecurity whitelist today, the very idea of the claude whitelists for certain functionality already exists and is being used by them today.

And if they signed a contract permitting fully autonomous killbots, then using the whitelist mechanism would be a contract violation. I have some degree of faith that we'd know if such a contract were signed, because half the staff would quit. (As opposed to half the Google staff quitting after signing such a contract, which has been proven to be an incorrect expectation -- such a contract was signed, and I've heard of exactly one person quitting over it. There may be more, I don't know.)

I suppose we're supposed to be satisfied that the letter of the law supports this steamroller? Because that's what matters?

The legal apparatus is one of the tools the death machine uses to get what it wants.

Explicitly?

Wow, explicitly means it is directly defined in the statue. Which it isn't.

Did you mean implicitly and accidentally say the exact opposite?

I doubt that is going to change anytime soon. They are a private entity, so they can manage and change their primary system any way they want.

also if you look at how the two factions separate from each other decade by decade (there used to be overlap, almost none now) it's obvious that there will be no reconciliation.

it's a musical chairs game at this point, whoever is in power when the democratic facade cracks will be able to seize power and transition into whatever single party state follows.

They probably will, and the comment section here on HN will overwhelmingly applaud it. Next question?

I get downvoted every time I point out that this was entirely rational. This, downvoters, is why it was entirely rational. Does that mean I agree with it? Of course not. But investments are made to pay off, and this one certainly has for OpenAI.

EDIT: Oh damn getting downvoted, tho not surprising. It looks like Meta Glasses are hated as MAGA, maybe Zuckerberg should call them MAGA glasses ha

That is still not corruption, yet. Also in Germany it is the executive branch which controls who is sued or policed by the stately organs.

So favorism can be passed down this way, but not we are not at corruption yet. If reciprocity is expected, then you could call it that. Or could perhaps even file for negligence in treating all other company actors the same, especially if you are Anthropic yourself.

Still, I blame the US voters as much as the current administration if the later is just clowns and thieves.

Also, IANAL and HN discussing US things is always foreign to me.

Right, because "supply chain risk" designation is as it pertains to them being a supplier to the military, not a overall assessment of their standing as a corporate citizen. Not to mention that the administration wants to go full steam ahead when it comes to AI development, so there's no internal contradiction here.

You're ascribing complex motives to toddlers.

[1] https://www.cnbc.com/2026/02/25/thrive-capital-openai-joshua...

Which sounds sensible on the surface, until you realize that all military organizations have extensive experience with that exact question, and have spent centuries refining their practices. Deferring that to a private company is actually a major regression and a concerning role to pass on to the public regardless.

FWIW I am not pro military, but it's a prominent part of human culture and not going away anytime soon. I do understand the nature of professions, however, and only one of these groups has made the interpretation of this question their specialization.

And it also doesn't mean that Anthropic is a supply chain risk merely for not wanting AI to be the active decision maker in live or death situations in war.

And Anthropic's objection was recently confirmed: the US military blew up a school in Iran due to an AI error, and killed more than a hundred kids.

that's the mobster-loyalty mentality, and it's not how successful (read: desirable for the most people) governments function

But that's not at issue here. Obviously everyone agrees that the Pentagon can issue RFQ's to whatever specifications it wants. They can buy whatever they want, for the same reason that you or I are free to sell whatever we want.

The subject at hand is an attempt to use national security regulatory power to coerce Anthropic into selling a product it doesn't want to sell.

Separately, as a note to your made up example:

Cluster bombs are uniquely efficient against humans, especially in trenches. The US is not a signatory to the international treaty banning their use. It does not like being limited in how it conducts war. I strongly doubt that it would agree to terms from a private enterprise to similar effect.

The DoD could have used the same authority to seize the technology if it wanted to. Especially in a time of war. DoD has instead chosen to respect Antrhopic's boundaries and has simply barred anyone in the agency from buying a product that comes with strings attached.

This is 100% on Anthropic for product:market fit failure.

Without taking sides in this statement, I do think it's important for a private company like Anthropic to have a mechanism it can turn to when it feels it's been inequitably treated by the government.

Not for peasants like you and me! We are forced to surrender our Seventh Amendment rights in order to be able to do most things that are part of everyday life.