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Anthropic suing the U.S. Department of War perhaps wasn\u2019t a surprise, but it was nevertheless a shock.\u00a0<\/p>\n
This is the sort of thing that has happened, but is rare\u2014and a matter of last resort. For more than a week, the Pentagon and Anthropic, valued at $380 billion, have been wrapped in a very public conflict over how the Trump Administration can (and can\u2019t) use AI. The result: Secretary of War Pete Hegseth last week designated the company a \u201csupply chain risk.\u201d<\/p>\n
In its lawsuit, filed yesterday in the U.S. District Court for the Northern District of California, Anthropic says the Pentagon\u2019s actions are \u201cunprecedented and unlawful.\u201d It also claims that, for Anthropic, \u201chundreds of millions of dollars\u201d of government contracts are either canceled or in jeopardy. This is the comment that Anthropic offered to my colleague Beatrice Nolan: \u201cSeeking judicial review does not change our longstanding commitment to harnessing AI to protect our national security, but this is a necessary step to protect our business, our customers, and our partners.\u201d<\/p>\n
In short, \u201cwe\u2019re not letting this go.\u201d And it\u2019s worth saying: There\u2019s absolutely precedent for a large, emerging tech giant suing the government, albeit in different circumstances. Consider Palantir: In 2016, the company sued the U.S. Army over its intelligence software procurement process, arguing it wasn\u2019t getting a fair opportunity to compete\u2014and a federal judge ultimately sided with Palantir. Something similar happened in 2014, when SpaceX sued the U.S. Air Force. SpaceX demanded that its rockets be allowed to compete for key launches, and the two sides eventually settled. (SpaceX won many launch contracts in the years that followed.) And even incumbents aren\u2019t immune to fights like this: There was also the DoD\u2019s $10 billion JEDI cloud contract with Microsoft, which led to separate lawsuits from Amazon and Oracle (an imbroglio the government only resolved by annulling the contract in 2021).\u00a0<\/p>\n
So, this does happen. That said, this conflict between the Pentagon and Anthropic isn\u2019t only contentious for its content (including ethical questions around the extent to which AI can be used for autonomous killing) but for the sheer financial stakes. In February, the company closed its $30 billion Series G, building on the billions that have already been poured into the one true competitor to OpenAI. As Fortune\u2019s Jessica Mathews reported last week, investors have mostly held the line with Anthropic CEO Dario Amodei for now\u2014but that doesn\u2019t mean this is going to be easy moving forward.\u00a0<\/p>\n
If anything, it will only get more public, too.<\/p>\n
A call for your questions\u2026 <\/strong>I\u2019ll be interviewing Harvey CEO Winston Weinberg for the next episode of the Term Sheet Podcast, and I want to ask him your questions! Have questions for Winston? Send \u2018em to alexandra.garfinkle@fortune.com.<\/p>\n See you tomorrow,<\/p>\n Allie Garfinkle Submit a deal for the Term Sheet newsletter here.<\/p>\n Joey Abrams curated the deals section of today\u2019s newsletter<\/em>.<\/em> Subscribe here.<\/p>\n – <\/span>KAST<\/b>, a New York City?based platform designed for saving and spending stablecoins, raised $80 million in Series A funding. <\/span>QED<\/b> Investors<\/b> and <\/span>Left<\/b> Lane<\/b> Capital<\/b> led the round and were joined by <\/span>Peak XV Partners<\/b>, <\/span>HSG<\/b>, and <\/span>DST<\/b> Global<\/b> Partners<\/b>.<\/span><\/p>\n – <\/span>Isembard<\/b>, a London, U.K.-based manufacturer of high-precision products for the aerospace, defense, energy, and robotics industries, raised $50 million in funding from <\/span>Union<\/b> Square<\/b> Ventures<\/b>, <\/span>Tamarack<\/b> Global<\/b>, <\/span>IQ Capital<\/b>, and angel investors.<\/span><\/p>\n – <\/span>Avvoka<\/b>, a London, U.K.-based developer of AI-powered drafting technology for law firms, raised \u00a314 million ($18.7 million) in funding. <\/span>Valhalla<\/b> Ventures<\/b> led the round.<\/span><\/p>\n – <\/span>Axiomatic<\/b> AI<\/b>, a Cambridge, Mass.-based developer of AI tools for science and engineering, raised $18 million in seed funding. <\/span>Engine<\/b> Ventures<\/b> led the round and was joined by <\/span>Kleiner<\/b> Perkins<\/b>, <\/span>Big Sur Ventures<\/b>,<\/span> G Vision Capita<\/b>l, <\/span>Propagator<\/b> Ventures<\/b>, and <\/span>Liquid 2<\/b>.<\/span><\/p>\n – <\/span>Escape<\/b>, a San Francisco-based developer of agentic AI technology designed to discover and fix security vulnerabilities in engineering workflows, raised $18 million in Series A funding. <\/span>Balderton<\/b> led the round and was joined by <\/span>Uncorrelated<\/b> Ventures<\/b> and existing investors <\/span>IRIS<\/b> and <\/span>Y Combinator<\/b>.<\/span><\/p>\n – <\/span>Levitate<\/b>, a Raleigh, N.C.-based marketing platform for managing professional relationships, raised $16 million in funding. <\/span>Harbert<\/b> Growth<\/b> Partners<\/b> led the round and was joined by <\/span>Bull<\/b> City<\/b> Venture<\/b> Partners<\/b> and <\/span>Northwestern Mutual Future Ventures<\/b>.<\/span><\/p>\n – <\/span>Augur<\/b>, a London, U.K.-based AI platform designed to protect critical national infrastructure, raised $15 million in seed funding. <\/span>Plural<\/b> led the round and was joined by <\/span>First<\/b> Kind<\/b>, <\/span>SNR<\/b>, <\/span>Flix<\/b>, and<\/span> Tiny VC<\/b>.<\/span><\/p>\n – <\/span>Shiva<\/b>, a S\u00e3o Paulo, Brazil-based community platform designed for entrepreneurs using AI to build new products, raised $10 million in pre-seed funding. <\/span>Monashees<\/b> led the round and was joined by <\/span>Endeavor<\/b> Catalyst<\/b>.\u00a0<\/span><\/p>\n – <\/span>Racquet<\/b> 360<\/b>, a Miami, Fla.-based padel and racket sports company, raised $9 million in funding from <\/span>Sunrise<\/b> Padel<\/b> Capital<\/b>, <\/span>Profluence<\/b> Capital<\/b>, and <\/span>Taktika<\/b> Equity<\/b>.<\/span><\/p>\n – <\/span>Coral<\/b>, a New York City-based rebates and financing platform for energy-efficient HVAC and electrical upgrades, raised $7.5 million in seed funding. <\/span>ResilienceVC<\/b> led the round and was joined by <\/span>Twelve<\/b> Below<\/b>, <\/span>Floating<\/b> Point<\/b>, <\/span>Accion<\/b> Ventures<\/b>, <\/span>Blackhorn<\/b> Ventures<\/b>, <\/span>Remarkable<\/b> Ventures<\/b>, and <\/span>New<\/b> Climate<\/b> Ventures<\/b>.<\/span><\/p>\n – <\/span>Utexo<\/b>, a Dubai, U.A.E.-based platform settling USDT transactions on the bitcoin network , raised $7.5 million in seed funding. <\/span>Tether<\/b>, <\/span>Big<\/b> Brain<\/b> Holdings<\/b>, and <\/span>Portal<\/b> Ventures<\/b> led the round and were joined by <\/span>Franklin<\/b> Templeton<\/b>, <\/span>Maven11<\/b> Capital<\/b>, <\/span>Fulgur<\/b> Ventures<\/b>, <\/span>Alchemy VC<\/b>, and others.<\/span><\/p>\n – <\/span>Yourco<\/b>, a Chicago, Ill.-based frontline employee communication and intelligence company, raised $6 million in Series A funding. <\/span>High<\/b> Alpha<\/b> led the round.\u00a0<\/span><\/p>\n – <\/span>Anchr<\/b>, a New York City-based AI-powered operating system for food distributors, raised $5.8 million in seed funding from <\/span>a16z<\/b> Speedrun<\/b>, <\/span>Anterra Capital<\/b>, <\/span>Offline<\/b> Ventures<\/b>, Long Journey Ventures, and others.<\/span><\/p>\n – <\/span>Crafting<\/b>, a San Francisco-based developer of AI agents for software development, raised $5.5 million in seed funding. <\/span>Mischief<\/b> led the round and was joined by <\/span>WndrCo<\/b> and angel investors.<\/span><\/p>\n – <\/span>Cytotrait<\/b>, a Manchester, U.K.-based gene editing company for food and agriculture, raised \u00a33 million ($4 million) in seed funding. <\/span>Northern<\/b> Gritstone<\/b> led the round and was joined by the <\/span>UK Innovation & Science Seed Fund <\/b>and <\/span>Northern Universities Ventures Fund<\/b>.\u00a0<\/span><\/p>\n – <\/span>Intelligent Legal Solutions<\/b>, a Chicago, Ill.?based legal technology company designed to help private fund lawyers automate certain workflows, raised $3 million in seed funding. <\/span>Chicago<\/b> Ventures<\/b> led the round.<\/span><\/p>\n – <\/span>Orca<\/b> Fraud<\/b>, a Cape Town, South Africa-based fraud intelligence platform, raised $2.4 million in funding. <\/span>Norrsken22<\/b> led the round and was joined by <\/span>OneDayYes<\/b>, <\/span>Enza Capital<\/b>, and <\/span>CV VC Africa<\/b>.<\/span><\/p>\n – <\/span>ISPN<\/b>, backed by <\/span>Align<\/b> Capital<\/b> Partners<\/b>, acquired <\/span>ZCorum<\/b>, an Alpharetta, Ga.-based managed services and diagnostics company for broadband service providers. Financial terms were not disclosed.<\/span><\/p>\n – <\/span>
X:<\/strong> @agarfinks
Email:<\/strong> alexandra.garfinkle@fortune.com<\/p>\nVENTURE CAPITAL<\/h3>\n
PRIVATE EQUITY<\/h3>\n