You're making it sound like this is commonly practiced and a standard procedure for the DoD, yet according to Anthropic,

>Designating Anthropic as a supply chain risk would be an unprecedented action—one historically reserved for US adversaries, never before publicly applied to an American company.

Some very brief googling also confirmed this for me too.

>Everyone is fixated on the name of the rule (and to be fair: the administration is emphasizing that name for irritating rhetorical reasons), but if they called it the "DoD vendor exclusion list", it would be more accurate.

This statement misses the point. The political punishment to disallow all US agencies and gov contractors from using Anthropic for _any _ purpose, not just domestic spying, IS the retaliation, and is the very thing that's concerning. Calling it "DoD vendor exclusion list" or whatever other placating phrase or term doesn't change the action.

>an unprecedented action

it's also unprecedented for a contractor to suddenly announce their products will, from now on, be able to refuse to function based on the product's evaluation of what it perceives to be an ethical dilemma. Just because silicon valley gets away with bullying the consumer market with mandatory automatic updates and constantly-morphing EULAs doesn't mean they're entitled to take that attitude with them when they try to join the military industrial complex. Actually they shouldn't even be entitled to take that attitude to the consumer market but sadly that battle was lost a long time ago.

>for _any _ purpose

they're allowed to use it for any purpose not related to a government contract.

> it's also unprecedented for a contractor to suddenly announce their products will, from now on, be able to refuse to function based on the product's evaluation of what it perceives to be an ethical dilemma

That is a deeply deceptive description of what happened. Anthropic was clear from the beginning of the contract the limitations of Claude; the military reneged; and beyond cancelling the contract with Anthropic (fair enough), they are retaliating in an attempt to destroy its businesses, by threatening any other company that does business with Anthropic.

>Anthropic was clear from the beginning of the contract the limitations of Claude

No, that's not what they said.

"Two such use cases have never been included in our contracts with the Department of War, and we believe they should not be included now".

It’s not clear to me that the AI itself will refuse. You could build a system where AI is asked if an image matches a pattern. The true/false is fed to a different system to fire a missile. Building such a system would violate the contract, but doesn’t prevent such a thing from being built if you don’t mind breaking a contract.