Anthropic executives say Pentagon blacklisting could hit billions in sales, harm reputation

March 9 (Reuters) - Anthropic executives said the U.S. government's blacklisting of the AI firm could cut its 2026 revenue by multiple billions of dollars and cause reputational harm.

The company filed a lawsuit on Monday to block the Pentagon from placing it on a national security blacklist, escalating its high-stakes battle with the U.S. military over usage restrictions on its technology.

Here is what its top executives said in federal court filings:

CFO KRISHNA RAO

• "Across Anthropic's entire business, and adjusting for how likely any given customer is to take a maximal reading, the government's actions could reduce Anthropic's 2026 revenue by multiple billions of dollars."

• If the government's actions are allowed to stand, the impact to Anthropic would be "almost impossible to reverse".

• Anthropic projects that hundreds of millions of dollars in 2026 revenue may be at risk related solely to work carried out for the Department of Defense.

• The actions could undermine investors' confidence in Anthropic and will increase Anthropic's costs to raise the funds it needs to operate.

• Anthropic could lose 50% to 100% in revenue from defense contractors and others with dependence on the Defense Department.

HEAD OF PUBLIC SECTOR THIYAGU RAMASAMY

• "The government's actions immediately and irreparably harm Anthropic. The designation also impugns Anthropic's integrity and reputation as a trusted partner, having a real but incalculable effect on sales to non-governmental customers."

• Expect immediate loss of more than $150 million in annual recurring revenue tied to existing and expected Defense Department contracts.

• From December 2025 to January 2026, Anthropic saw a fourfold increase in annual recurring revenue run rate from public sector customers; business in the next five years was projected to increase to multiple billions

• If defense contractors cut ties, the firm's expected public sector annual recurring revenue of more than half a billion dollars in 2026 could "shrink substantially or disappear altogether".

CHIEF COMMERCIAL OFFICER PAUL SMITH

• A partner with a multi-million-dollar annual contract switched from Claude to a rival generative AI model for a U.S. Food and Drug Administration deployment, eliminating an anticipated revenue pipeline of more than $100 million.

• Negotiations with financial institutions worth roughly $180 million combined have been disrupted, a $15 million contract was paused, and one fintech customer cut a contract from $10 million to $5 million, saying the "situation" with the Pentagon made them unwilling to commit to spending more on Claude.

• Anthropic has received inquiries from more than 100 enterprise customers expressing "deep fear, confusion and doubt" about the repercussions of associating with the company".