# Anthropic Says Government Tensions Could Hurt Its Business. The Warning Goes Beyond Federal Contracts. > Source: > Published: 2026-10-02 14:33:08+00:00 # Anthropic Says Government Tensions Could Hurt Its Business. The Warning Goes Beyond Federal Contracts. ## Anthropic's IPO prospectus points to its clashes with the U.S. government as a potential source of wider business disruption as the company prepares to go public. Anthropic is warning prospective investors that deteriorating relations with governments could affect far more than its relatively small public-sector business, potentially damaging relationships with commercial customers, partners, employees and investors as the artificial intelligence company prepares to go public. The warning appears in Anthropic's IPO prospectus reviewed by [Reuters](https://www.reuters.com/business/media-telecom/anthropic-warns-government-attitudes-may-hurt-customer-ties-ipo-prospectus-shows-2026-10-02/), which has not yet been made public. The company said government agency contracts account for less than 1% of its annual revenue, but government perceptions of Anthropic, its technology and its conduct could still result in revenue losses, disruption and reputational damage. Anthropic said adverse government measures could lead to negative publicity and unfavorable perceptions among current and prospective customers, business partners, employees and investors, according to the filing. The company cited several encounters with the U.S. government this year as examples of the risks it faces. Those tensions became public in February when President Donald Trump directed federal agencies to stop using Anthropic technology. The [General Services Administration](https://www.gsa.gov/about-gsa/newsroom/news-releases/gsa-stands-with-president-trump-on-national-security-ai-directive-02272026) said on Feb. 27 that it was removing Anthropic from USAi.gov and its Multiple Award Schedule in response to the president's directive to "immediately cease" use of the company's technology. The Multiple Award Schedule is one of the federal government's main procurement channels for commercial products and services. Anthropic's dispute with the government also extended to the Pentagon. The Department of Defense determined that the company represented a supply-chain risk after a disagreement over restrictions Anthropic placed on the use of its AI technology. That decision was upheld on Sept. 25 by the [U.S. Court of Appeals for the District of Columbia Circuit](https://media.cadc.uscourts.gov/opinions/docs/2026/09/26-1049-2194984.pdf) in Anthropic PBC v. United States Department of War. The ruling addressed the government's determination that Anthropic qualified as a supply-chain risk under federal law. Anthropic had objected to allowing Claude to be used without restrictions for certain applications, including fully autonomous weapons and domestic mass surveillance. The dispute has become one of the most visible clashes between an AI developer seeking to impose safeguards on its technology and a government seeking broad access to advanced models for national-security purposes. The company faced another disruption in June involving its newly released Claude Fable 5 and Mythos 5 models. On June 12, the U.S. government imposed export controls restricting access to the models by foreign nationals, including those inside the United States, [Anthropic](https://www.anthropic.com/news/fable-mythos-access) said at the time. Because the company said it could not immediately verify users' nationality in real time, it suspended the models for all customers. Anthropic later said the government had acted after becoming aware of a method for bypassing Fable 5's safeguards. The company worked with government officials and other partners before the controls were lifted on June 30. Access to Fable 5 was restored globally beginning July 1, while Mythos 5 initially returned for a limited group of U.S. organizations under the company's Project Glasswing program, according to [Anthropic](https://www.anthropic.com/news/redeploying-fable-5). The prospectus warns that comparable government actions could happen again and could create operational disruptions even when restrictions are later withdrawn, according to Reuters. Anthropic said such measures could cause material revenue losses and broader reputational consequences. The disclosure comes as Anthropic moves toward one of the most closely watched technology listings in years. The company announced in June that it had confidentially submitted a draft registration statement on Form S-1 to the [U.S. Securities and Exchange Commission](https://www.anthropic.com/news/confidential-draft-s1-sec), giving it the option to proceed with an initial public offering after the SEC review process. Anthropic said at the time that the number of shares and proposed price had not yet been determined. The confidential prospectus also sets out unusually broad warnings about the technology Anthropic sells. According to [Reuters](https://www.reuters.com/business/media-telecom/anthropic-warns-government-attitudes-may-hurt-customer-ties-ipo-prospectus-shows-2026-10-02/), the filing says increasingly capable AI could create "catastrophic or existential risks to humanity," while also describing the commercial and regulatory risks associated with developing such systems. Government scrutiny of advanced AI companies has continued to expand. The Federal Trade Commission is investigating Anthropic, OpenAI and other AI developers over potential safety risks associated with their products, an agency spokesperson confirmed to [Axios](https://www.axios.com/2026/09/30/ftc-openai-anthropic-ai-safety-investigation) this week. © Copyright IBTimes 2026. All rights reserved.