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(Bloomberg) — Anthropic PBC told a judge it could lose as much as billions of dollars in revenue this year and urged quick action on its request to block the Trump administration\u2019s declaration of the company as a US supply-chain risk after a blowup with the Pentagon over artificial intelligence safety issues.<\/p>\n
The startup made a case for urgency to US District Judge Rita F. Lin at a hearing in San Francisco a day after Anthropic sued the Defense Department over the supply-risk designation. The dispute is over the startup\u2019s demand for assurances that its AI wouldn\u2019t be used for mass surveillance of Americans or autonomous weapons deployment.<\/p>\n
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Microsoft Corp., which owns a stake in OpenAI and Anthropic, meanwhile filed its own brief urging a judge to temporarily block the government\u2019s moves because they have the potential to delay all ongoing Defense Department \u201ccontracting for IT products and services.\u201d<\/p>\n
Michael Mongan, an attorney for Anthropic, argued Tuesday that the federal government\u2019s actions have led to more than 100 enterprise customers contacting the company to express doubt about continuing their work with Anthropic.<\/p>\n
He also said that a financial services company paused its negotiations with Anthropic regarding a $50 million contract, a pharmaceutical firm asked to shorten the duration of its contract by 10 months, and a financial technology company \u201cexplicitly tied\u201d reducing its $10 million contract to $5 million to Anthropic\u2019s issues with the federal government. In all, Mongan said that Anthropic\u2019s chief financial officer has estimated harm to its 2026 revenue could range from hundreds of millions of dollars to billions of dollars.<\/p>\n
A hearing on Anthropic\u2019s request had been set for April 3. The judge moved it up to March 24.<\/p>\n
Mongan asked for a commitment from the federal government that it would not take any retaliatory actions against Anthropic before the next hearing \u2014 such as by issuing an executive order impacting the AI startup.<\/p>\n
\u201cI\u2019m not prepared to offer any commitments on that issue,\u201d said James Harlow, a lawyer for the Justice Department.<\/p>\n
Anthropic wants the judge to remove the supply-chain risk designation and require US agencies to withdraw directives related to it. The company claims it is being shut out for disagreeing with the administration and argues the legal principles at stake affect every federal contractor whose views the government dislikes.<\/p>\n
Last week, the Pentagon formally notified Anthropic of its determination. Chief Executive Officer Dario Amodei then issued a statement saying the government\u2019s actions were not \u201clegally sound\u201d and had left the company with \u201cno choice but to challenge it in court.\u201d <\/p>\n
Besides Microsoft, Anthropic has drawn support from other tech-industry players.<\/p>\n
In a joint letter to the judge, dozens of AI scientists and researchers from OpenAI and Google \u2014 competitors and, in Google\u2019s case, also an investor \u2014 expressed support for Anthropic. They said existing AI systems can\u2019t \u201csafely or reliably handle fully autonomous lethal targeting, and should not be available for domestic mass surveillance of the American people.\u201d<\/p>\n
In its brief, Microsoft also warned of significant costs for government suppliers to remove Anthropic software and that the uniqueness of Anthropic\u2019s products may leave some with no alternatives.<\/p>\n
The case is Anthropic v. US Department of War, 26-cv-01996, US District Court, Northern District of California (San Francisco).<\/p>\n
(Updates to highlight Microsoft\u2019s amicus brief.)<\/p>\n
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