Amazon announced that it will continue offering Anthropic’s artificial intelligence models to its cloud customers, except for workloads involving the Department of Defense (DOD), following the federal agency's decision to label Anthropic a 'supply chain risk' on Thursday [1][2]. Anthropic responded by stating it has 'no choice' but to challenge the designation in court [1][2]. The supply chain risk designation requires defense vendors and contractors to certify they do not use Anthropic's models in Pentagon-related work [1]. Amazon Web Services (AWS) is supporting customers and partners as they transition to alternatives for DOD workloads, while maintaining access to Claude for all other use cases [1]. Microsoft and Google issued similar statements, confirming continued access to Anthropic's Claude models outside defense work [1][2].
Palantir, which partnered with Anthropic and AWS in November 2024 to provide Claude models to defense and intelligence agencies, saw its stock rally 15% for the week, outperforming large-cap tech peers after the U.S. attacked Iran [2]. Analysts attributed Palantir's gains to its extensive business with the U.S. military and intelligence agencies, noting that government spending accounts for about 60% of Palantir's revenue [2]. Despite concerns about Anthropic's blacklisting, Wall Street appears unconcerned, with Rosenblatt analysts maintaining a buy recommendation and raising their price target to $200 from $150. Palantir's stock closed at $157.16 on Friday [2]. Analysts noted that the 'conflict in the Middle East bodes well' for Palantir's government pipeline and that there are 'adequate alternatives' to Anthropic's Claude models [2].
Palantir inked a $10 billion contract with the Army last year and supplies AI capabilities such as weapons targeting through its MavenSmart System program, which was used in Iran [2]. The Defense Department's exclusion of Anthropic's technology from government contracts followed a failed agreement on the use of AI models for autonomous weapons and domestic surveillance [2].
Amazon remains one of Anthropic's largest financial backers, investing $8 billion since 2023, and AWS is Anthropic's primary cloud and training partner [1]. Anthropic committed to use 500,000 of Amazon's Trainium 2 chips as part of an $11 billion AWS data center campus built for the startup, called Project Rainier [1]. AWS offers Anthropic's Claude models through its Bedrock platform, including to users of its GovCloud service for sensitive and regulated workflows [1]. Amazon has won billions in contracts to provide cloud and AI services to federal agencies, earmarking up to $50 billion on AI infrastructure for U.S. government customers in November [1].
According to both sources, Anthropic's CEO Dario Amodei confirmed the company will challenge the supply chain risk designation in court [1][2].
CONCLUSION
Amazon, Microsoft, and Google will continue offering Anthropic's AI models for non-defense workloads, while Palantir's stock surged 15% amid increased military activity and despite Anthropic's blacklisting. Analysts remain optimistic about Palantir's prospects, citing robust government demand and alternative AI options. The market takeaway is that the exclusion of Anthropic from defense contracts has not significantly dampened investor sentiment toward Palantir or cloud providers.