Trump and Hegseth wage war on Anthropic — and should be soundly defeated in court |
President Donald Trump and Secretary of Defense Pete Hegseth, pictured in January, are turning a contract dispute into an unconstitutional government action.
President Donald Trump and Secretary of Defense Pete Hegseth have badly abused their authority in an effort to punish AI company Anthropic for not capitulating to their demands. It is one thing for the government to decline to contract with a company based on a disagreement over terms. It is something quite different — and illegal and unconstitutional — for the government to use its enormous power to retaliate against a company because of disagreement in a contract dispute.
The dispute arose in the context of renegotiations between the Defense Department and San Francisco-based Anthropic over a $200 million contract for the use of the artificial intelligence tool, Claude. Anthropic had licensed Claude to the Defense Department in June 2024 with its normal authorized use policies, which reflected the state of Claude’s reliability and principles for its safe use.
In January, however, the Trump administration announced that AI companies must eliminate their negotiated and accepted use policies in favor of the Defense Department’s new mandate, which said it could use AI tools for “any lawful purpose.” Anthropic agreed to make some adjustments in its use policies, but insisted throughout the negotiations that it would license Claude to the federal government only with the agreement that it could not be used for mass surveillance of Americans or for autonomous weapons that operate without human control.
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Of course, it is Anthropic’s right to decide how its property will be used. It has insisted on these restrictions since entering the defense market. It is also the right of the federal government to refuse terms and not enter into a contract, though I would hope that the federal government is not planning to use AI for mass surveillance or to kill people without human involvement.
But rather than treat this as a contract dispute, President Trump posted a vitriolic attack on Anthropic on Truth Social.
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“The Leftwing nut jobs at Anthropic have made a DISASTROUS MISTAKE trying to STRONG-ARM the Department of War, and force them to obey their Terms of Service instead of our Constitution,” Trump wrote. “Their selfishness is putting AMERICAN LIVES at risk, our Troops in danger, and our National Security in JEOPARDY. Therefore, I am directing EVERY Federal Agency in the United States Government to IMMEDIATELY CEASE all use of Anthropic’s technology. We don’t need it, we don’t want it, and will not do business with them again!”
Secretary of Defense Hegseth escalated this further by announcing that he was designating Anthropic a “supply-chain risk” and prohibiting any company doing business with the U.S. military.
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“Effective immediately, no contractor, supplier or partner that does business with the United States military may conduct any commercial activity with Anthropic,” Hegseth said.
This is simply unprecedented. Hegseth’s designation is illegal and exceeds the authority provided by federal law. There is no basis for this designation other than revenge by the Trump administration. Anthropic has done nothing to make itself a risk to national security.
Designating an entity a “supply-chain risk” is reserved for companies linked to foreign adversaries that pose a national-security risk to U.S. interests. This has never been used against an American company. The government is acting to impose enormous economic harm on Anthropic solely because the company would not accede to Trump and Hegseth.
Moreover, astoundingly, the secretary of defense’s order states that every Department of Defense contractor must immediately stop using Anthropic’s products, but the government does not have that authority. Even if the order were valid, its scope would be limited to preventing the use of Claude in carrying out specific government contracts.
Designating a company as a supply-chain risk does not prevent other government suppliers or companies from using its product in other activities. The deliberate misrepresentation of what it means to be labeled a supply-chain risk is another form of retaliation because it is designed to ensure that the company loses customers and revenue based on confusion about their own potential exposure.
Simply put, this is an effort to economically destroy Anthropic.
Hegseth’s retaliation against Anthropic is not just illegal; it is blatantly unconstitutional.
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The Trump administration is violating the First Amendment by punishing Anthropic for its speech and views. It is an effort to destroy the company’s property without due process of law. The government is discriminating against Anthropic, with restrictions imposed on no other company, in violation of the requirement for equal protection under the law.
I expect that if Anthropic chooses to sue, it will win in court, and the supply-chain restriction will end. Anthropic may be able to collect monetary damages for its losses. But the underlying point must not be lost. President Trump and those in his administration, like Secretary of Defense Hegseth, believe that they can use their powers to do anything, including imposing great retaliatory punishments on those who won’t agree to their desired terms. This just can’t be right or accepted in a nation that operates under the rule of law.
Erwin Chemerinsky is the dean and the Jesse H. Choper Distinguished Professor of Law at the UC Berkeley School of Law.