Except it's not, really. If Anthropic/Claude doesn't mean the DoD's need, they can and should just put out an RFP for other LLM providers. I'm sure there's plenty of others that'd happily forgo their morals for that sweet government contract money.
No US company has to provide services to the DoD or any other branch of government. It's not "veto power" it's being selective of who you do business with, which is 100% legal.
I don't understand this phenomena of people acting like the stupidest human beings who ever lived. This is not your first day on Earth - you understand how coersion works and what voluntary means.
> has never been invoked against an American company.
There's always a first. I am assuming it is not illegal to do that. It's a completely reasonable business decision to ensure your supply chain does not depend on things that may change against your goals. For example, you don't want to build or depend on an open source platform that you know is gonna rug pull, if you count on it remaining open source, do you? American or otherwise.
As to this being 100% legal, I'm not so sure (not a lawyer). It might not be a criminal offese, but there's a whole category of abuse of power that this may fall under if Anthropic is put under a certain status without real justification. Many powers given to the executive branch are not absolute and can't be applied arbitrarily, but require justification. Anthropic might be able to sue the government for declaring them a "supply-chain risk" without sufficient justification. E.g. they could claim that not being sufficiently patriotic in the eyes of the administration does not constitute a risk, and that since their not the sole supplier of the tech, they were not trying to strong arm the government to do anything.
> does not "influence their supply chain"
I would be wary of making this conclusion. Obviously it could conceivably influence the supply chain when you build on top of their model. If you look at the type of risks enumerated in DoD guidelines, it is not just "oh this software has vulnerability" which is what started the discussion in this subthread in the first place. There are many kinds of risks DoD needs to address, none are particularly new; including Sustainment Risk. The closest thing I remember to this case was Sun Java "no use in nuclear facility" EULA term, which LLM suggests was ignored by DoE/D because that was interpreted as a "limitation on warranty" not a "restriction of use."