The Information Technology Industry Council sent a letter to US Secretary of Defense Pete Hegseth after the Pentagon labeled AI company Anthropic a supply chain risk. The group warned that the move could disrupt access to advanced technology used across the federal government.
The issue began after Hegseth posted on X last week that the Defense Department would designate Anthropic a “Supply-Chain Risk to National Security.” The order followed a dispute over a $200 million contract between the Pentagon and the AI company.
Anthropic refused to accept two contract clauses. The clauses required the use of its technology for domestic surveillance and autonomous weapons. After Anthropic rejected those terms, the Pentagon moved to restrict the company from military supply chains.
Under the designation, contractors and suppliers that work with the US military cannot conduct commercial activity with Anthropic. Industry leaders reacted quickly because the rule had never been applied to a domestic company before.
Reuters reported that the Information Technology Industry Council raised concerns in a letter dated Wednesday. The group represents major technology companies, including Nvidia, Amazon, and Apple.
The letter did not mention Anthropic directly. Instead, it focused on the broader impact of the designation.
The council wrote, “We are concerned by recent reports regarding the Department of War’s consideration of imposing a supply chain risk designation in response to a procurement dispute.”
The group warned that the move could limit the government’s access to advanced tools developed by US companies.
The letter stated that the decision threatens “to undermine the government’s access to the best-in-class products and services from American companies that serve all agencies and components of the federal government.”
Contract disputes should follow standard process
Jason Oxman, CEO of the Information Technology Industry Council, argued that the government should use existing procurement systems to resolve contract disputes.
He wrote, “Emergency authorities such as supply chain risk designations exist for genuine emergencies and are typically reserved for entities that have been designated as foreign adversaries.”
Oxman said agencies should rely on the Federal Acquisition Security Council when evaluating supply chain risks in federal procurement.
The Department of Defense responded briefly. A spokesperson said the department would follow its usual process and respond directly to the authors of the letter.
The decision marks one of the first major public disputes between the US government and an AI company over military technology rules. Industry leaders now watch closely as the situation develops.
