Artificial intelligence company Anthropic has filed an unprecedented lawsuit against the United States government after being formally labelled a “supply chain risk”, escalating a bitter dispute over the military use of advanced AI technology.

The legal action, filed in a federal court in California, challenges a directive issued by the administration of Donald Trump that effectively barred US government agencies from using Anthropic’s AI systems. The company argues the move was politically motivated retaliation after it refused to remove restrictions on how its technology could be deployed by the US military.

Anthropic’s lawsuit claims the decision was “unprecedented and unlawful” and violated constitutional protections around free speech and due process.

“The Constitution does not allow the government to wield its enormous power to punish a company for its protected speech,” the firm said in its complaint. “No federal statute authorises the actions taken here.”

The conflict stems from a disagreement between Anthropic’s chief executive Dario Amodei and US defence officials, including Pete Hegseth, over how the company’s artificial intelligence tools could be used by the Pentagon.

Anthropic has long maintained strict contractual limits on the deployment of its technology, including bans on using its AI models for “lethal autonomous warfare” and for mass domestic surveillance of American citizens.

According to the lawsuit, defence officials demanded that the company remove these restrictions from its government contracts. Anthropic refused, arguing that such safeguards were essential to ensure responsible use of powerful AI systems.

The company said negotiations with the Department of Defense were initially progressing and that both sides had been working toward revised language that would allow continued cooperation while preserving ethical limits.

However, those talks reportedly collapsed after the White House intervened.

Following the breakdown in negotiations, the Pentagon designated Anthropic as a “supply chain risk” — a classification normally applied to companies considered insecure or unreliable partners for government systems.

The designation effectively blocks US government agencies and contractors from using Anthropic’s software tools.

The move was accompanied by public criticism from the Trump administration, with White House officials accusing the company of attempting to dictate military policy.

Liz Huston, a spokesperson for the White House, told reporters that Anthropic was “a radical left, woke company” seeking to impose its own conditions on national defence operations.

“Under the Trump Administration, our military will obey the United States Constitution — not any woke AI company’s terms of service,” Huston said.

Anthropic disputes that characterisation and argues that its restrictions were standard contractual provisions designed to prevent misuse of AI systems.

The legal challenge names a broad list of defendants, including the executive office of President Trump and senior government officials such as Marco Rubio and Howard Lutnick.

The suit also targets 16 federal agencies, including the Departments of Defense, Homeland Security and Energy.

Anthropic claims the directive banning its technology has caused significant reputational and commercial damage.

The company said that both current and prospective commercial contracts were now under threat, potentially jeopardising “hundreds of millions of dollars in the near term”.

It also argued that the decision had created a broader chilling effect across the technology sector by discouraging companies from speaking publicly about the risks associated with advanced AI.

The case has already drawn support from across the technology industry.

Nearly 40 employees from rival companies including Google and OpenAI filed a joint legal brief backing Anthropic’s position, despite the firms being competitors in the rapidly expanding AI sector.

The signatories warned that the deployment of advanced AI systems without safeguards could create serious risks, particularly if used for mass surveillance or autonomous weapons.

“As a group, we are diverse in our politics and philosophies,” the engineers wrote in their submission. “But we are united in the conviction that today’s frontier AI systems present risks when deployed to enable domestic mass surveillance or the operation of autonomous lethal weapons systems without human oversight.”

Anthropic’s flagship AI system, Claude, has become widely used by technology companies and developers for coding, research and enterprise software tasks.

Companies such as Microsoft, Amazon and Meta have confirmed they will continue to use the technology in commercial applications, although not in projects involving US defence agencies.

Anthropic is not seeking financial damages in the case. Instead, it is asking the court to declare the government’s directive unconstitutional and remove the “supply chain risk” designation immediately.

Legal experts believe the dispute could become a landmark case in defining how governments interact with AI developers.

Carl Tobias, a law professor at the University of Richmond, said the case could ultimately reach the US Supreme Court.

“Anthropic may very well win in federal court,” Tobias said. “But this administration is not shy about appealing. It will probably go to the Supreme Court.”

The outcome could have major implications for the fast-growing AI industry, particularly as governments worldwide increasingly rely on private technology firms to supply critical artificial intelligence systems for defence, intelligence and national security operations.

For now, the lawsuit marks a rare moment in which a major technology company is openly challenging government authority over the future deployment of artificial intelligence.

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The following segment was excerpted from Royce Small-Cap Opportunity Fund FY 2025 Manager Commentary.

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Five of the portfolio’s 10 equity sectors made a positive impact on performance in 2025, with Industrials, Information Technology, and Financials making the

Indian equities showed signs of stability in mid-session trade on Tuesday, with the Nifty managing to hold above key psychological levels while the Bank Nifty outperformed broader benchmarks. Market participants appeared cautiously optimistic as easing oil prices and a decline in volatility indicators helped steady investor sentiment after recent bouts of turbulence.

Despite the Nifty moving within a narrow band of 24,180–24,215 during the session, banking stocks provided strong support to the market, reflecting selective buying interest. Analysts say the recent dip may have already seen a short-term bottom, although global uncertainties continue to keep traders alert.

Rahul Sharma from JM Financial Services pointed to easing volatility as a key factor behind the improved sentiment. “Yes, so the VIX is down today which is most importantly due to the pullback that we are seeing in oil prices and that should aid the sentiment as well. Yesterday, we did create a panic low in the Nifty around 23,700 and post that it has been only buying that has been seen on the screen and post today’s gap up markets have sustained the 24,000 and above landmark and the way it is set up maybe a bit of volatility here and there but eventually things should gradually improve from here,” he said in an interview to ET Now.

However, he cautioned that markets remain vulnerable to global developments, particularly geopolitical tensions. “So, we are doing a very selective approach in this kind of a market, stay away from the high beta names because the market is still probably not out of the woods. War is something that we are not good at predicting.”

In the current environment, Sharma believes defensive sectors are the safest bet for traders. “So, in this kind of a market it is best to stick to defensives and one defensive space in this kind of a market is clearly pharma. So, pharma index continues to impress on the long side, that is one index which has not seen the brunt of selling pressure and today we seeing a good pull back happening in the pharma space.”

Several pharmaceutical stocks are showing strong technical setups, he noted. “So, the likes of Aurobindo Pharma is coming out from a multi-week like resistance. We are seeing Glenmark giving a breakout, today being the top performer in the pharma space. We are also seeing Sun Pharma also similarly positioned very well. So, it is best to get into a basket of pharma stocks for the trading perspective unless and until global volatility does not stabilise, it is best to stick to this pharma space.”
According to Sharma, a major shift in market sentiment would likely depend on geopolitical developments. “And for Nifty to sort of turn the tables and for a big reversal in place, this has to be a major ceasefire announcement which comes from the Middle East.”Given the unpredictable environment, he recommends a shorter trading horizon. “So until then, it is best to stick to pharma and Nifty, it is better to be a day trader in this kind of a market than to look at carrying positions and seeing gap ups and gap downs sort of ruin your trades in case you happen to be on the wrong side.”

From a strategic standpoint, Sharma highlighted a key support level for the benchmark index. “Yes, so as a strategy, Nifty crucial level to keep an eye on is 23,500. Yesterday, we came close to that. Let us say due to volatility if that level does emerge, that is a very good level to get into like top up your portfolios and get into Nifty ETFs, get into, in fact, midcap Nifty ETFs as well.”

He also remains constructive on select public sector names. “And banking as we have known PSU banks are the best placed setup even after this correction, so something like an SBI remains a strong buy in this kind of a volatility and we feel that the stock should be back to where it was a few days back.”

For now, the market’s leadership appears to be concentrated in a few resilient pockets. “So, PSU banks, apart from that public sector enterprises, and pharma these are the three sectors where we are looking for opportunities on the long side,” Sharma said.

With volatility still a key feature of the current market environment, experts suggest that investors remain selective and focus on sectors that are demonstrating relative strength while keeping a close watch on global developments.

A growing number of businesses are paying cybercriminals after ransomware attacks, as hackers deploy artificial intelligence to make their tactics more targeted, sophisticated and damaging.

New research from cybersecurity consultancy S-RM and advisory firm FGS Global shows that 24.3 per cent of companies targeted by ransomware attacks paid the demanded ransom in 2025, marking a sharp increase from 14.4 per cent in 2024.

The figures represent the first significant rise in ransom payments after two years of decline. In 2023, about 16.4 per cent of affected organisations paid, while the peak came in 2022 when 27.6 per cent of victims settled with attackers.

Although the latest numbers remain below that high point, the jump suggests cybercriminals are becoming increasingly successful at pressuring companies into handing over money.

Cybersecurity experts say artificial intelligence is rapidly reshaping how ransomware attacks are planned and executed.

Hackers are now able to use AI tools to scan vast amounts of stolen or publicly available data, allowing them to identify the most sensitive information belonging to a target organisation. By focusing on data that could cause the greatest reputational, financial or operational damage if exposed, attackers are able to increase pressure on victims to pay.

Jamie Smith, head of cybersecurity at S-RM, said criminals were increasingly relying on AI to refine their strategies.

“Attackers are using AI to find the most sensitive information that could cause maximum damage,” he said. “Threats are becoming far more specific and personalised, designed to maximise the victim’s fear and willingness to pay.”

This evolution has made ransomware attacks more difficult for companies to defend against, particularly for organisations with large volumes of sensitive data.

The report also sheds light on the scale of payments being demanded by cybercriminal groups.

According to the study, ransom payments in 2025 ranged from as little as $10,000 to more than $1 million, with the average payment reaching $296,000.

However, cybersecurity specialists warn that the total cost of a ransomware attack often extends far beyond the ransom itself. Businesses frequently face operational disruption, regulatory scrutiny, reputational damage and the expensive process of rebuilding compromised IT systems.

Many organisations also incur costs related to legal advice, customer notifications and forensic investigations after an attack.

The research suggests that industrial and manufacturing companies were particularly likely to pay ransoms during the past year.

This trend appears to be driven by the severe operational disruption ransomware attacks can cause in sectors that rely heavily on continuous production.

Factories, logistics systems and supply chains can grind to a halt if core IT infrastructure becomes inaccessible. In such situations, businesses sometimes view paying a ransom as the quickest way to restore operations and avoid prolonged shutdowns.

One high-profile cyber incident involved Jaguar Land Rover, whose factories around the world were forced to shut down for the entire month of September after its IT systems were compromised.

Major UK retailers were also targeted in 2025, including Marks & Spencer and Co-op. None of the companies has publicly confirmed whether a ransom was paid.

One of the biggest challenges in measuring ransomware activity is that many companies refuse to disclose whether they have paid hackers.

Security specialists say businesses often fear that publicly admitting to ransom payments could make them more attractive targets for future attacks.

Criminal groups may interpret payment as a sign that a company has both the resources and willingness to comply with demands.

As a result, ransomware incidents are often kept confidential, with payments handled through private negotiations involving cybersecurity consultants, insurers and specialist crisis advisers.

While artificial intelligence is helping companies automate operations and improve efficiency, experts warn it is also opening up new vulnerabilities that cybercriminals are eager to exploit.

Jenny Davey, co-head of crisis management at FGS Global, described the technology as a “double-edged sword”.

“While AI can drive efficiency and performance across the business, it can also open up new attack vectors for cybercriminals to exploit,” she said.

The rapid adoption of AI tools across corporate systems means organisations must invest heavily in cybersecurity and staff training to avoid creating new entry points for attackers.

The rise in ransomware payments highlights the growing importance of cyber resilience for businesses across every sector.

Experts say companies must go beyond traditional IT security measures and adopt a broader approach that includes employee awareness, robust data protection practices and detailed incident response plans.

This includes maintaining secure backups, limiting access to sensitive information and regularly testing systems against potential cyber threats.

As ransomware attacks become more sophisticated, and increasingly powered by artificial intelligence, businesses face mounting pressure to strengthen their defences before becoming the next target.

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Amidst repatriations and a gradual return to operations, air traffic is slowly picking up as several airlines begin reopening some of their routes.

The recovery is starting timidly in the Middle East. After several days of paralysis, long-haul air traffic is gradually resuming. On Friday, several Emirati airlines relaunched some of their international routes, particularly to Europe, with reduced schedules.

Daily flight operations through 9 March: Air Arabia and Emirates continuing to climb, while Qatar doubled the number of operated flights and Etihad nearly so. A bit of a pullback from flydubai on Monday. pic.twitter.com/9xuopI5kEj

— Flightradar24 (@flightradar24) March 10, 2026

Key Points

• Etihad Airways (Abu Dhabi): Restarted limited commercial flights from March 6–19 to over 70 destinations including Paris, London, New York, and Tel Aviv. Prices are unusually high — €1,900–2,000 for economy one-way, compared to €350–650 normally.
• Emirates (Dubai): Operating reduced services to 82 destinations such as Sydney, Singapore, and New York, aiming to restore its full network soon. Transit passengers are only accepted if their connecting flights are confirmed.
• Qatar Airways (Doha): Doha’s hub remains closed, but the airline is running emergency flights from Oman and Saudi Arabia.
• Capacity & Safety: Dubai International Airport is running at about 25% of normal traffic. The European Aviation Safety Agency (EASA) has extended its high-risk advisory until March 11.
• Repatriation Efforts: France and other states are organizing special flights to bring citizens home. Over 15,000 people, including many French nationals, have already been evacuated.
• Future Outlook: The crisis raises questions about the vulnerability of Gulf hubs and whether ultra-long-range aircraft could shift demand toward more direct flights.

Abu Dhabi-Paris flights available again

Abu Dhabi-based Etihad Airways announced on Friday the resumption of a limited commercial flight schedule. From March 6 to 19, the carrier plans rotations between the capital of the United Arab Emirates and more than 70 destinations including London, Paris, Frankfurt, Delhi, New York, Toronto and Tel Aviv.

Another major player in the Gulf, Emirates has also started to revive its rotations. The Dubai-based airline is currently operating a reduced schedule to 82 destinations, including London, Sydney, Singapore and New York, with the aim of “a return to 100% of its network” in the coming days. For now, the operator only accepts passengers transiting through Dubai if their connecting flight is maintained.

The situation remains more uncertain for Qatar Airways. The hub in Doha, Qatar, remains closed. However, the company continues to organize relief flights from Oman and Saudi Arabia to allow passengers to move in the region.

For the time being, activity at Dubai International Airport remains much lower than normal. According to data from the air tracking site Flightradar24, the hub – usually one of the busiest in the world – is still operating at only about 25% of its usual capacity. The European aviation safety regulator (EASA) has also extended its high-risk warning until 11 March.

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