[netinstructions]

This is kind of crazy. Instead of just cancelling a mutually-agreed upon contract where Anthropic refused to bow to sudden new demands, the Dept of Defense went straight to the nuclear option: threatening to label an American tech company as a "supply chain risk" which is a heavy-handed tactic usually reserved for foreign adversaries (think Huawei or DJI).

It's also incoherent that the DoD/DoW was threatening to invoke the Defense Production Act OR classifying them as "supply chain risk". They're either too uniquely critical to national defense OR they're such a severe liability that they have to be blacklisted for anyone in the DoD apparatus (including the many subcontracts) to use.

How are other tech companies supposed to work with the US government and draw up mutual contracts when those terms are suddenly questioned months later and can be used in such devastating ways against them? Setting the morals/principals aside, how does this make for rational business decision to work with a counterparty that behaves this way.

[solenoid0937]

Are they just threatening to label? It seems to me like they have already labeled.

[mediaman]

They have not; a social media post does not satisfy the requirements of 10 USC section 3252.

They are required to notify Congress (they have not), prepare a report with specific sections (they have not), and the reasons must fall within a set of categories outlined by statute (this does not).

There will be a court fight and they will lose, just like they lost the tariff battle, because of poor competence.

(Trump's post on Truth Social was actually fine. He said the USG would stop doing business with Anthropic, which is within its legal right. Hegseth's follow-on post is the problem. It is possible that Trump did not expect or want Hegseth to do that, that this was meant as bluster to bump along the negotiations; Hegseth has a recent history of stepping out of line within the administration and irritating people like Rubio.)

[jart]

If the USG can mandate that everyone who works for a company that ever took a federal contract be genetically engineered, then I think they can tell people to not use Claude.

[titanomachy]

What.

[SpicyLemonZest]

That's part of the recurrent confusion with this administration. In previous administrations, including Trump 1, people didn't need to spend a ton of time thinking about what it means to make a legally effective proclamation, because there was a baseline of competence. When a government official announced "We're doing X", they would do so as a summary of a large amount of legal process with the intent and effect of causing X to be true. If you went to challenge it in court of course, you'd have to identify some specific action as the label, but everyone would understand that this is a formalism.

Here, Hegseth has simply made a social media post. He did not publish any official investigation which led to the report. He did not explain what legal power would permit him to impose all the restrictions the post claims to impose. There is not, five hours later, any order on an official government website about it. So we have a real question. If a Cabinet secretary posts "I am directing the Department of War to designate...", does that in and of itself perform the designation, or is it simply an informal notice that the Department of Fascist Neologisms will perform the designation soon?

[surgical_fire]

A question - being considered a supply chain risk is the same as being sanctioned? Or does it only affect their ability to be a defense supplier in the US (even if transitively?)

It's an honest question by the way - not trying to throw any gothas.

Just trying to understand if comoanies or people that don't orbit defense contracting are free to operate with Anthropic still or risk being sanctioned too.

[solidsnack9000]

It's not the same thing as being sanctioned. In broad outline, a supply chain risk is a company that can't sell to or have its products or components resold to USG; whereas, a sanctioned entity is one that can't do business with anyone -- anyone who does so will be punished.

[surgical_fire]

Thanks for clarifying! After I asked this I found similar information buried across threads.

[michaelhoney]

It is indeed kind of crazy. That's because the current US administration is composed of people whose sole qualification is being able to work for Donald Trump. Being competent, rational or ethical is career-limiting.