The U.S. military has formally designated artificial intelligence firm Anthropic a supply chain risk, a senior Pentagon official and a source directly familiar with the situation told CBS News, a sweeping move that could cut it off from military contracts.

The Trump administration and Anthropic — the only AI company deployed on the Pentagon's classified networks — are at an impasse over Anthropic's push for guardrails that would explicitly ban the U.S. military from using its Claude model to conduct mass surveillance on Americans or power fully autonomous weapons. The Pentagon has said it needs the ability to use Claude for "all lawful purposes."

Defense Secretary Pete Hegseth announced last week that Anthropic would be cut off from its government contracts and designated a supply chain risk, but Anthropic had not received formal notification of that step until Thursday.

Hegseth said the military will phase out Anthropic over six months. A source told CBS News that no timeline for offboarding Claude was provided in Thursday's designation.

The U.S. military has used Claude in its strikes on Iran that began last weekend, two sources familiar with the matter previously told CBS News. It's not clear exactly how the artificial intelligence model is being deployed.

Anthropic received the supply chain risk designation two days after CEO Dario Amodei told investors he was still in talks with the Pentagon "to try to deescalate the situation. Amodei said at a Morgan Stanley conference that the two sides "have much more in common than we have differences," according to audio exclusively obtained by CBS News.

This is a breaking story; it will be updated.