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SAN FRANCISCO — Microsoft has stepped into Anthropic’s legal fight with the Department of Defense, urging a federal court to temporarily block the Pentagon from enforcing a “supply chain risk” designation that effectively blacklists the AI company from defense-related use, March 10. Microsoft said the pause is needed to prevent sudden disruptions to military technology systems and to preserve time for a negotiated solution.
In a filing in U.S. District Court in San Francisco, Microsoft backed Anthropic’s request for a temporary restraining order, arguing that defense contractors could be forced to quickly rework products and contracts that rely on Anthropic’s technology if the designation remains in place. The company said an immediate cutoff could interfere with the military’s access to advanced AI tools already in use.
Microsoft said a court order would “enable a more orderly transition and avoid disrupting the American military’s ongoing use of advanced AI,” according to the filing. It also warned that companies would need to “act immediately to alter existing product and contract configurations,” a move that could “potentially hamper U.S. warfighters at a critical point in time.”
Anthropic sued the Trump administration after the Pentagon labeled the company a supply chain risk, an action the startup has called “unprecedented and unlawful.” The company said the designation is causing irreparable harm by threatening contracts and pushing customers to reconsider or abandon business ties. Reuters reported Anthropic said the blacklist could jeopardize tens of millions of dollars in business, while other reports described broader financial fallout.
The dispute grew out of failed negotiations over how Anthropic’s AI models could be used by the military. Anthropic opposed terms that would allow use of its models for fully autonomous weapons or mass domestic surveillance, while the Pentagon sought broader access for lawful military purposes, according to reports on the case.
Microsoft’s involvement is notable because the company has a major defense business and a growing financial stake in Anthropic. In November 2025, Microsoft said it would invest up to $5 billion in Anthropic as part of a broader partnership tied to Azure cloud capacity. Microsoft also remains a major backer of OpenAI, giving it interests across multiple leading AI firms.
After the Pentagon’s action, Microsoft, Amazon and Google told customers that Anthropic’s products would remain available on their cloud platforms outside defense applications, underscoring wider concern across the tech sector about the reach of the government’s move.
Anthropic, founded in 2021 by former OpenAI executives and known for its Claude models, has become one of the fastest-growing AI companies in the United States. Reuters reported last month that the company reached a $380 billion valuation in its latest funding round.