Pentagon weighs severing ties with AI firm Anthropic over potential security risks

WASHINGTON – Defense Secretary Pete Hegseth is moving toward severing business ties with artificial intelligence firm Anthropic by designating the company a "supply chain risk," according to a report from Axios.

The designation would effectively blacklist the company from the defense sector. Any firm seeking contracts with the U.S. military would be forced to terminate all business dealings with Anthropic.

"The unwinding is going to be a mess, and we’re going to make sure they pay for forcing our hand on this," a senior official said.

Sources noted that such penalties are typically reserved for foreign adversaries. The Department of Defense has not issued an official comment regarding a timeline for the potential decision.

The potential move by Defense Secretary nominee Pete Hegseth to target Anthropic represents an unprecedented escalation, signaling a fundamental shift toward a confrontational relationship between the federal government and Silicon Valley. By weaponizing national security tools—mechanisms historically reserved for foreign adversaries like Huawei—against a premier domestic technology firm, the incoming administration is breaking a long-standing protocol of shielding American innovators from such aggressive internal scrutiny.

This maneuver reflects an increasingly hawkish stance toward the tech sector, likely fueled by a mix of ideological friction and growing concerns over the concentration of power among artificial intelligence leaders. By singling out Anthropic—a company that has built its brand on AI safety and alignment—the administration is issuing a de facto warning to the entire industry: no firm, regardless of its domestic roots or safety credentials, is immune to political pressure.

For the markets, this development introduces a profound layer of regulatory uncertainty. Defense contractors and tech partners entangled in the overlapping ecosystems of the Pentagon and Anthropic now face a precarious strategic dilemma. In the long term, this intervention risks creating a "chilling effect" across the innovation landscape, potentially discouraging AI firms from pursuing government partnerships or leading them to self-censor their research to avoid falling into the crosshairs of federal policy. Ultimately, this is not merely a contractual dispute; it is a high-stakes battle for control over the future of strategic technology in the United States.

This issue has no direct or tangible impact on the daily mainstays of the Vietnamese-American community—from the phở restaurants and small businesses of Little Saigon to the nail salon industry and the flow of remittances. Instead, this is a high-level development regarding U.S. technology and national defense policy.