> I know everyone says this is political but it actually seems like a textbook designation
It literally is a textbook definition, signed into US law:
“Supply chain risk,” means the risk that an adversary may sabotage, maliciously introduce unwanted function, or otherwise subvert the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance of a covered system so as to surveil, deny, disrupt, or otherwise degrade the function, use, or operation of such system (see 10 U.S.C. 3252).
To add onto what another commenter said, the pen analogy would be more like the manufacturer designing pens that stopped working when used to sign strike orders they disagreed with.
The pen example makes sense if the intermediary were to ship the pen as part of the final product but not if the pen is simply used to draft designs of the final product. It seems that this designation would prohibit using the pen anywhere in the process which doesn't really make sense.
That's not at all what this is. Anthropic was very clear up-front what they would and wouldn't allow. They were not going to "subvert" anything. "Degrade function" in this context means that there is a risk that ongoing changes to the covered system will cause problems for the government. That wouldn't have been the case here; it would have been clear from the start what the military would and wouldn't be allowed to do with it, and that wouldn't change.
> so as to surveil
How does Android and iPhone meet the grade given apps have pretty consistently leaked locations, base layouts etc?
It is not the textbook definition, because what Anthropic is doing is not sabotage, malicious, or subversive. Those are the key words in the definition. They are just refusing to add a feature to the military's specification. So their bid falls short of requirements.
??? What are you talking about. Anthropic isn't an adversary and they're not required to sell for purposes they don't want to. It's not sabotage and it's not malicious.
This is a designation reserved for terrorists and the link.
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Selling a pen labeled "this pen will refuse to sign certain orders" is not sabotage or malicious and is thus not a supply chain risk. The DoD is free to not buy from Anthropic, but designating them as a supply chain risk is incorrect, as well as arguably arbitrary and capricious given their public criticism of Anthropic's beliefs.