OpenAI sweeps in to ink deal with Pentagon as Anthropic is designated a ‘supply chain risk’—an unprecedented action likely to crimp its growth

OpenAI announced late Friday it reached a deal for the Pentagon to use its AI models in classified systems, just hours after the U.S. government designated OpenAI arch-rival Anthropic a “supply chain risk” in a move that threatens to deal a serious blow to Anthropic’s business.

Legal and policy experts said the government’s unprecedented decision presents profound questions about the relationship between the government and business in the U.S. It is the first time the U.S. has ever designated an American company a supply chain risk...