Legal Battle Intensifies: Pete Hegseth Faces Court Over Company Blacklisting Amid Mass Surveillance Controversy

Anthropic, the creator behind the AI model known as “Claude,” has intensified its legal dispute following comments from Defense Secretary Pete Hegseth, who described the AI as a “supply-chain risk and threat to national security.” The company is requesting that the D.C. Circuit consider a challenge to its “good conscience” limitations as an urgent matter.

Represented by a law firm previously targeted by former President Donald Trump’s executive orders against “lawfare,” Anthropic and its CEO, Dario Amodei, have petitioned for a halt to what they term the administration’s “retaliation” campaign. This request comes just days after they initially filed a lawsuit in a California federal district court.

The company argues that the administration’s sudden shift, including “blacklisting” and designating the company as a “risk,” infringes on the First Amendment. Anthropic maintains that Claude is not suitable for autonomous lethal warfare or mass surveillance of Americans, despite their ongoing partnership with the Department initiated in 2024, which involved a two-year agreement commencing in 2025 valued at up to $200 million.

The lawsuit asserts, “The Constitution confers on Anthropic the right to express its views—both publicly and to the government—about the limitations of its own AI services and important issues of AI safety.”

Claude operates under a publicly available constitution that outlines Anthropic’s commitment to “broadly ethical” and “honest” values and behavior. The company states that this framework is the reason their Usage Policy has always clearly specified two particular restrictions regarding the government’s usage of Claude.

Unsatisfied with the “RADICAL LEFT, WOKE COMPANY” and its position, the president on Feb. 27 lashed out on Truth Social and threatened to “use the Full Power of the Presidency to make them comply, with major civil and criminal consequences to follow.”

Trump’s cabinet secretary responded accordingly, not only designating Anthropic a national security threat but also declaring “effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic.”

In a lengthy social media post, Hegseth claimed Anthropic’s “sanctimonious rhetoric of ‘effective altruism’” was an attempt to “strong-arm the United States military into submission – a cowardly act of corporate virtue-signaling that places Silicon Valley ideology above American lives.”

“Anthropic will continue to provide the Department of War its services for a period of no more than six months to allow for a seamless transition to a better and more patriotic service,” Hegseth stated.

As a result of the foregoing and more potential harms to come, Anthropic believes there’s ample reason for the D.C. Circuit to launch an “immediate judicial intervention” and put a stop to the “unlawful actions.”

“[M]ultiple customers have contacted Anthropic asking whether they can continue working with it. The Department itself has reached out to Anthropic customers, directing them to end relationships with Anthropic,” the motion said. “As a result, customers have signaled potential cancellations, delays in national-security contract negotiations, and possible suspension or removal of Claude. Even non-defense customers are expressing hesitation about continuing to work with Anthropic. Hundreds of millions or even billions of dollars are at risk.”

Anthropic’s emergency action comes as Hegseth simultaneously tries to defeat other First Amendment retaliation claims at the D.C. Circuit.

One month ago, a district judge preliminarily ruled in favor of Sen. Mark Kelly, D-Ariz., in his lawsuit against Hegseth, finding him “likely to succeed on the merits” that the Trump administration unlawfully retaliated against the senator for “unquestionably protected speech” in a video criticizing the president’s lethal strikes on alleged drug smugglers’ boats in international waters.

Before the injunction, the defense secretary branded Kelly a member of the “Seditious Six” Democratic lawmakers who appeared in that video, accusing him of undermining the chain of command by telling military service members they “can refuse illegal orders.” For that, Hegseth went after the former Navy captain’s retirement rank and pay grade — so far in vain.

After losing the first round, Hegseth taunted Kelly, writing “Sedition is sedition, ‘Captain’” on X. But the secretary’s prospects of reversal on appeal do not appear to have materially improved at the D.C. Circuit since then.