India, Feb. 16 -- The Pentagon and the San Francisco-based Artificial Intelligence firm Anthropic are locked in a dispute over the agency's use of the latter's flagship AI model, Claude. The dispute, which concerns Anthropic's refusal to let the agency use Claude with no security restriction for "all lawful purposes," escalated as a Pentagon official said that the agency could sever its ties with the company and declare it a "supply chain risk" over the dispute.

A Pentagon official, speaking anonymously to Axios, revealed that the agency could cut ties and declare the company a supply "chain risk," which effectively means any company doing business with the Pentagon cannot have any business ties with Anthropic.

"It will be an enormous p...