Anthropic actors claim that current and prospective customers have been demanding new terms and even supporting negotiations since the US Department of Defense documented the introduction of AI. supply chain risk late last month, according to court papers that also revealed new financial information about the company.
Hundreds of millions of dollars in expected revenue this year from work tied to the Pentagon is already at risk for Anthropic, the company’s chief financial officer, Krishna Rao, wrote in court filing on Monday. But if the government has its way and forces more companies to do business with AI startups, regardless of any ties to the military, Anthropic could end up losing billions of dollars in sales, he said. Its all-time sales, since announcing its technology in 2023, exceed $5 billion, according to Rao.
Anthropic’s revenue exploded like his Examples of Claude he began to defeat opponents and show superior abilities in areas such as generating software code. But the company spends a lot of money on computer infrastructure and remains unprofitable. Rao noted that Anthropic has spent more than $10 billion to train and distribute its models.
Anthropic’s chief commercial officer Paul Smith gave several examples of partners who have raised privacy concerns for AI startups in recent days. He said a financial services client suspended negotiations on a $15 million deal because of a supply chain, and two major financial services firms have refused to close deals worth $80 million unless they have the right to unilaterally cancel their contracts for any reason. Grocery store chain cancels sales meeting, citing supply chain risk, Smith added.
“All have taken actions that reflect a deep distrust and growing fear of collaborating with Anthropic,” Smith wrote.
The executives’ comments are part of a statement from six Anthropic executives in support of an earlier order that would have allowed the San Francisco-based company to continue doing business with the Defense Department until lawsuits over the supply chain risk are resolved.
Anthropic has sued the Trump administration in two courts. A case filed in San Francisco federal court on Monday claims the government violated the company’s free speech rights. A separate lawsuit filed Monday in a federal appeals court in Washington, DC accuses the Department of Defense of unfairly discriminating against and retaliating against Anthropic.
The company is seeking a hearing as soon as Friday in San Francisco for temporary relief. The legal battle and failed sales follow a week-long standoff between Anthropic and the Pentagon over the potential use of AI technology for mass domestic surveillance and deadly autonomous weapons. Anthropic insists AI is not yet capable of operating safely, while the Pentagon wants the right to make that decision alone.
Legally, the supply chain designation prevents a narrow set of companies doing business with the Pentagon from integrating Anthropic into their systems. But Defense Secretary Pete Hegseth has cast a wider net. He has been published on X at the end of last month that “effective immediately, no contractor, supplier, or partner doing business with the US military may conduct any business with Anthropic.”
Rao wrote that the Pentagon reinforced that message by reaching out to several startups about their use of Claude, which he said he learned happened by talking to an investor that Anthropic and smaller companies both share. “They have grown nervous and uncertain about their ability to use Claude,” Rao wrote.
The Pentagon declined to comment on the cases and did not immediately respond to a request for comment on Rao’s alleged communications.
