Anthropic Says It Could Face $5 Billion Loss in Dispute With Pentagon

- Anthropic faces a $5 billion loss due to its dispute with the Pentagon, the company said in a court filing. - Researchers from OpenAI and Google signed an amicus curiae brief in support of Anthropic. - Anthropic is seeking a court order to continue Pentagon work while the legal case plays out. Employees at rival companies, including OpenAI, are supporting Anthropic as the startup warns that its escalating dispute with the Pentagon could cost $5 billion in lost business. More than 30 researchers from OpenAI and Google, including Jeff Dean, chief scientist at Google DeepMind, filed a joint amicus brief on Monday supporting Anthropic in its legal battle with the government. The employees signed in their personal capacity and do not represent the official views of their companies. Their filing argues that the Pentagon's decision to label Anthropic a "supply chain risk" could harm the US AI industry overall. "If allowed to proceed, this effort to punish a leading American AI company will undoubtedly have consequences for America's industrial and scientific competitiveness in the field of AI and beyond," the employees wrote. The dispute arises from a breakdown in negotiations between Anthropic and the Pentagon over guardrails on how its AI models could be used, particularly around mass domestic surveillance and lethal autonomous weapons. Last month, Defense Secretary Pete Hegseth said that "no contractor, supplier or partner doing business with the United States military may conduct any commercial activity with Anthropic," marking a dramatic expansion of the "supply chain risk" designation. Anthropic has since sued the government in two courts, arguing that the decision violates its First Amendment rights and unfairly retaliates against the company. In court papers, Anthropic executives warned that the fallout is already impacting the company's finances. Chief Financial Officer Krishna Rao wrote in a court filing that hundreds of millions of dollars in expected revenue tied to Pentagon-related work is at risk this year. If the government succeeds in discouraging companies from working with Anthropic more broadly, Rao added, the company could lose up to $5 billion in sales, roughly equivalent to its total revenue since commercializing its AI technology in 2023. Anthropic's chief commercial officer, Paul Smith, wrote in a separate court filing that government pressure is causing business partners to take actions that "reflect a deep distrust and growing fear of partnering with Anthropic." Smith added that some clients paused negotiations or demanded escape clauses, while others canceled meetings entirely after the supply chain designation. The situation has also drawn criticism from industry leaders. OpenAI CEO Sam Altman, despite signing his own contract with the Pentagon after Anthropic fell apart, wrote on social media that enforcing the supply chain risk designation "would be very bad for our industry and our country." Major cloud providers such as Amazon and Microsoft have said they will continue to offer Anthropic's Claude AI models to customers without ties to the Pentagon. Anthropic is now seeking a temporary injunction allowing it to continue working with military contractors while the legal fight continues. The first hearing could take place in San Francisco on Friday. The Pentagon did not immediately respond to a request for comment outside normal business hours.