STORY: Artificial intelligence firm Anthropic sued the U.S. government on Monday, trying to block the Pentagon from placing it on a national security blacklist.
The lawsuit escalates Anthropic's high-stakes battle with the Defense Department over the uses - and limits - of AI in military technology.
Defense Secretary Pete Hegseth designated Anthropic a national security supply-chain risk last week.
That came after the startup refused to remove guardrails against using its AI for autonomous weapons or domestic surveillance.
Anthropic said in its lawsuit that the designation was unlawful and violated the company's freedom of speech.
The filing in federal court in California asked a judge to undo the designation and block federal agencies from enforcing it.
The designation poses a big threat to Anthropic's business with the government, and could limit the use of a technology that a source said was currently being used for military operations in Iran.
President Donald Trump has also directed the government to stop working with Anthropic, whose financial backers include Alphabet's Google and Amazon.com.
Trump and Hegseth said there would be a six-month phase-out.
Anthropic said even the best AI models were not reliable enough for fully autonomous weapons and that using them for that purpose would be dangerous.
The company also drew a red line on domestic surveillance of Americans, calling that a violation of fundamental rights.
The company said it would not be swayed by "intimidation or punishment."
Microsoft-backed OpenAI announced a deal to use its technology in the Defense Department network shortly after Hegseth moved to blacklist Anthropic.
CEO Sam Altman said the Pentagon shared OpenAI's principles of ensuring human oversight of weapon systems and opposing mass U.S. surveillance.
