It would be naive to think that a private company could deny the government access to any tech if they want it for military or surveillance etc usage. In this case the government isn't forcing Anthropic to do it, they have alternatives and are perhaps making an example of Anthropic for refusing.
You could even make a case that the "supply chain risk" designation DOES make sense. If Anthropic are opposed to certain uses of their software, then doesn't that potentially impact companies that are part of the supply chain as well?
A supply chain risk is specifically an entity that is likely to maliciously sabotage the US military's operations, such as Chinese companies that are controlled by the CCP. It is not simply a decision to "not buy from this company", but rather a wide-ranging decision that this particular company is a national security threat.
Is it coersion when people refuse to buy anything but free range chicken eggs?
DoD just refuses to buy a product. Anthropic just lost a customer because their product didn't fit the requirements of the customer.
Right, and if they chose independently to do so it would be their right. What makes this problematic is that "all those companies" did not choose to not to work with the Pentagon (or with Anthropic spefically, for that matter). They were compelled to using using a regulatory tool which was originally intended to combat hostile foreign espionage.
That's not a "choice" made by those third party suppliers. The Pentagon is using the Supply Chain Risk designation as a contract negotiating tactic.
That's not what happened. DOD bought a product, with terms precluding specific applications of the product. DOD decided to change the terms, vendor said no. DOD threw a hissyfit (well, Hegseth did) and said, "No one can use it if they do business with us!"
If they had just terminated their contracts with Anthropic, then there would likely be no issue beyond having to pay out any penalties for terminating a contract early. They could then go to Grok (as they did) and OpenAI and used them instead. Or even kept the contract with Anthropic and its limitations, and just used the others for the cases where Anthropic was not permitted.