Former Trump AI advisor Dean Ball has warned that the White House’s decision to designate Anthropic a “supply chain risk” could blow back on some of the biggest names in tech—including Google, Amazon, and Microsoft—all of whom have billions of dollars riding on the AI startup. Ball, reacting to Defence Secretary Pete Hegseth’s order barring any military contractor or supplier from doing business with Anthropic, said the move amounts to “attempted corporate murder. ” He added that if Hegseth gets his way, Google, Amazon, and Nvidia would effectively have to divest from Anthropic—a company they’ve collectively poured billions into.
Amazon alone has committed up to $8 billion in Anthropic. Google has invested around $2 billion. And Microsoft, while not a direct investor, relies on Anthropic’s models through its Azure cloud platform. A forced divestiture or business cutoff from any of these companies would send shockwaves through the AI investment landscape at a time when hundreds of billions are flowing into the sector.
The supply chain risk tag was designed for foreign adversaries, not American startups
The “supply chain risk” designation under 10 USC 3252 has historically been reserved for companies like China’s Huawei—firms considered genuine threats to US national security. Anthropic, by contrast, was the first frontier AI company to deploy its models on classified government networks back in June 2024. Its AI is actively used by the CIA, NSA, and across the Department of War for intelligence analysis and operational planning.
University of Minnesota law professor Alan Rozenshtein said the label “clearly was not designed for an American company that has a contract dispute with the government.” Anthropic has said it will challenge the designation in court.
Investors now face an uncomfortable question about building AI companies in the US
Ball didn’t stop at the immediate fallout. He said the precedent makes it nearly impossible to recommend starting or investing in an American AI company. If the government can slap a national security label on a domestic firm over a contract disagreement, the risk calculus changes for every venture capitalist and sovereign wealth fund eyeing the US AI market.
The timing makes things worse. OpenAI announced a $110 billion funding round on the same day, with Amazon investing $50 billion into the rival company. That creates an odd dynamic—Amazon simultaneously backing OpenAI while potentially being forced to cut ties with Anthropic.
For now, Anthropic says its commercial customers and API users are completely unaffected. But the bigger question—whether Washington can weaponise national security labels against American companies that push back—is one the courts will likely have to answer.
