March 9 (Reuters) – Anthropic executives said the U.S. government’s blacklisting of the artificial intelligence company could reduce its 2026 revenue by billions of dollars and cause reputational damage.
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 restrictions on the use of its technology.
Here’s what its executives said in federal court filings:
Chief Financial Officer Krishna Rao
* “Across Anthropic’s entire business, and adjusted for the likelihood of maximum reading by any given customer, the government’s actions could reduce Anthropic’s revenue by billions of dollars in 2026.” * If the government’s actions continue, the impact on Anthropic will be “nearly impossible to reverse.” * Humanity programs with hundreds of millions of dollars in revenue in 2026 may face risks associated only with work performed by the Department of Defense. * These actions could undermine investor confidence in Anthropic and would increase Anthropic’s costs of raising the capital needed to operate. * Anthropic could lose 50% to 100% of its revenue from defense contractors and other agencies that rely on the Department of Defense.
THYAGU RAMASAMY, Head of Public Sector
* “The government’s actions immediately and irreparably harm Anthropic. The designation also damages Anthropic’s integrity and reputation as a trusted partner, with a real but immeasurable impact on sales to non-government customers.” * Anticipates an immediate loss of more than $150 million in annual recurring revenue related to existing and anticipated Department of Defense contracts. * Anthropic’s annual recurring revenue run rate from public sector clients quadrupled from December 2025 to January 2026; business expected to grow into billions over next five years * The company predicts that more than $5 billion in public sector annual recurring revenue by 2026 could “shrink significantly or disappear entirely” if defense contractors cut ties.
Chief Commercial Officer Paul Smith
* A partner with a multi-million-dollar annual contract switched from Claude to a competitor’s generative AI model for deployment at the U.S. Food and Drug Administration, eliminating more than $100 million in an anticipated revenue pipeline. * Negotiations with financial institutions worth about $180 million have been interrupted, with a $15 million contract on hold and one fintech client cutting the contract from $10 million to $5 million, saying the Pentagon’s “circumstances” made them reluctant to commit more money to Crowder. * Anthropic has received inquiries from more than 100 corporate customers who expressed “deep fear, confusion and doubt” about the consequences of associating with the company.
(Reporting by Jubi Babu and Chris Thomas in Mexico City; Editing by Sonali Paul)