Anthropic's data center buildout at risk due to supply chain risk designation

Anthropic has sued the Department of Defense over its designation as a supply chain risk, which it calls 'unlawful'. This designation could lead to a loss of investor and customer confidence, making it hard for the company to fund further data center buildout. The direct loss of DoD work could cost hundreds of millions this year, and the broader uncertainty could cost 'multiple billions of dollars'. The designation came after Anthropic refused to change its terms of service, which prohibit mass surveillance and fully autonomous weapons. Anthropic has already spent more than $10 billion on model training and inference and expects to spend many billions more in the coming years. Federal agencies and contractors have six months to remove Anthropic products from Department of Defense contracts. No US company has ever been designated a supply chain risk. The lawsuit was filed in the US District Court, Northern District of California.