The US Secretary of Defense has designated San Francisco AI company, Anthropic, as a “supply chain risk to national security” under 10 USC 3252. This comes after Anthropic was blacklisted for refusing to allow the US military access to its AI models for mass domestic surveillance of American citizens or for fully autonomous lethal weapons. The company had a $200 million Pentagon contract for work on classified systems, but its terms were not met with new demands. The Pentagon demanded "unrestricted access to AI for all lawful purposes" when Anthropic declined to remove these restrictions. The White House responded by ordering every federal agency to cease use of Anthropic’s technology. However, a federal appeals court denied an appeal, stating that the balance in favor of the government was in favour of the federal government.