Artificial intelligence firm Anthropic has challenged a U.S. government decision labeling its technology as a potential supply-chain risk. CNBC reported that the designation could limit how the company’s AI systems are used within government operations.

The dispute centers around Anthropic’s Claude AI model and concerns over how advanced AI systems could be deployed in sensitive environments. The company argues that the designation could harm innovation and limit responsible AI development.

Despite the government’s concerns, Anthropic continues to receive support from major technology partners such as Amazon and Google. These companies have invested heavily in the startup and continue offering its models through cloud platforms.

The case could influence how governments regulate artificial intelligence companies moving forward. Experts say the outcome may shape policies around national security, technology supply chains, and the future use of AI in government agencies.