From the statement: "Secretary Hegseth has implied this designation would restrict anyone who does business with the military from doing business with Anthropic. The Secretary does not have the statutory authority to back up this statement. Legally, a supply chain risk designation under 10 USC 3252 can only extend to the use of Claude as part of Department of War contracts—it cannot affect how contractors use Claude…
They can also classify it as restricted data -- like nuclear weapons technology. Sure, there will be a court battle, but I don't think these companies want to take that chance. They'll capitulate after the lawyers realize that option is on the table.
Nuclear weapons technology is restricted under very specific legislative authority, where is the corresponding authority that could be selectively applied to a particular vendors AI models or services?