DTNS EXTRA: US DoD Officially Declares Anthropic a Supply Chain Risk

0:03Tom Merritt: Hello, Daily Tech News Show subscribers. I suppose you weren't expecting another episode from the Daily Tech News Show quite so fast, but right as we were publishing, the news broke that the Department of Defense of the United States has officially notified Anthropic that they are considered a supply chain risk and will be cut off from any commercial partners who work with the U.S. military. This being reported by Bloomberg, being reported by CNBC, being reported by Wall Street Journal and others. And the odd thing is that it is attributed to a senior Pentagon official. So we don't have a name on who's saying this.

0:46Tom Merritt: So it's somewhat sources say, but also these outlets, which I find to be fairly reliable, saying this is an official notification. So if you've been paying attention, I have been saying it's odd that they said they are declaring them a supply chain risk, but they haven't yet. And then the news we had in the main show of Daily Tech News Show today was that Anthropic was negotiating with the Department of Defense undersecretary. And I thought, well, maybe this is we're holding it over your head until you agree. Now, this could still be that. This could be they're not agreeing. Let's go ahead and tell them we've declared them a supply chain risk.

1:27Tom Merritt: At this point, we run into the limits of my knowledge about what else needs to go into declaring someone a supply chain risk. I assume there's some sort of publication of this formally that would go out to all partners advising them of that. I don't know if that has happened. I haven't seen a report like that. So we are in a weird quasi-official situation where an unnamed official, an unnamed senior Pentagon official, has informed Anthropic that they have officially been declared a supply chain risk. This could go several ways. The way it would normally go, the way I would expect it to go is that just means the paperwork hasn't been filed.

2:10Paperwork gets filed later this week and Anthropic gets named a supply chain risk. If that's the case, it is precedent setting that a U.S.

2:18Tom Merritt: company that is actively being used by the military in active operations is at the same time declared a supply chain risk, which means no one in the military should use their products, nor should anyone who contracts with the military use their products in any way that is related to the conducting of business with the U.S. military. So that would be quite unusual, not only because no one's ever declared a domestic company a supply chain risk that is almost exclusively reserved for foreign adversaries, but it would be a company that is still in a six-month grace period of being used as they wind down a contract, which we also don't know if it has been officially canceled or not.

3:03I suspect that the other way this could go is that we find out that this was really a heavy-handed negotiating method. Anthropic agrees to something and they change their objection, which has been they don't want their products to be used for mass surveillance or autonomous lethal systems, even if those uses were legal. And specifically, Dario Amode has said in a memo to its employees that it is mostly about mass surveillance. There's one line in the agreement that it objected to. It doesn't seem like these two can come to an agreement, though. So it's also quite possible that this is a negotiating tactic that fails.

3:45And Anthropik's like, OK, declare us a supply chain risk and takes a huge hit. it then becomes a precedent to hold over other companies, which is why OpenAI is objecting to that and saying it's probably not a good idea to declare them a supply chain risk and hoping that it wouldn't happen. But I imagine we'll have more clarity on this, well, at least a little more clarity on this on Friday's show with Jason Howell and Sarah Lane. So look forward to that. But I did want to get this out here. So if you're listening to the show, and you hear me say like, it seems like they're negotiating. I bet they end up coming to an agreement.

4:23And then you see that they've been officially declared a supply chain risk that you might wonder like, wait, why is Tom saying that when it seems like the thing he said hasn't happened yet has happened? It seems like it has happened now, but it's still a little soft. So the one thing I will say for sure is if those negotiations are still happening, they are not going well for Anthropic. and we will continue to see what we can get in the way of reliable information. Thanks for being a supporter of the Daily Tech News Show. That is your extra edition, supplementary to today's DTNS. Talk to you soon.