Compliance Stuff

The Department of War’s (“DoW”) dispute with Anthropic continues to evolve. Should you, as a government contractor, change your relationships with Anthropic or its products as a result?  To recap the story: Two weeks ago, DoW designated Anthropic, a major provider of AI tools, including the only AI tool cleared for classified systems, as a supply chain risk following a breakdown in negotiations over contractual use restrictions on Anthropic’s Claude model. This marked the first time a U.S.-based company has ever been designated a supply chain risk. A few days prior, DoW considered using the Defense Production Act to ensure preferred access and potentially compel changes to Anthropic’s products. After the designation, the President instructed federal agencies to stop using Anthropic technology, and DoW statements implied contractors should not engage commercially with Anthropic . Multiple  legal  commentators  questioned whether the Department’s actions exce...

On November 13, AI company Anthropic reported that its Threat Intelligence team had disrupted a state‑sponsored Chinese threat actor conducting what is believed to be the first largely autonomous AI‑orchestrated cyber espionage campaign. The threat actor used Claude Code with autonomous agentic orchestration to execute the majority of the intrusion life cycle— reconnaissance, exploitation, credential harvesting, lateral movement, and data exfiltration—across multiple global sectors . Claude Code is a developer-focused variant of the Claude large language model created by Anthropic , designed to function as an advanced, agentic coding assistant that automates complex software development. The key technical aspects of the campaign reveal that the AI agent autonomously carried out approximately 80 percent to 90 percent of all operational tasks . Human operators were responsible for selecting targets and giving strategic approvals, while the AI handled the majority of the tactical action...

Artificial intelligence (AI) is now part of daily life, powering customer service chatbots, virtual assistants like Siri and Alexa, automated email responses, and personalized shopping recommendations. But as these systems get smarter, they need ever-larger amounts of data to learn, often drawing on copyrighted books and creative works. This has led to new legal battles over whether AI companies are crossing the line into copyright infringement, or whether their use of these materials to train large language models qualifies as “fair use.” Meta’s Fair Use Win: The Importance of Market Impact One of the most closely watched cases in this area is  Kadrey v. Meta Platforms, Inc. , involving Meta (Facebook’s parent company) and its AI model “Llama.” The authors who brought the lawsuit argued that Meta used their books to train its AI without permission and that this would harm their ability to license their works in the future . The court approached the issue by carefully considering t...

By now you may have seen one of numerous media reports recently that artificial intelligence is poised to decimate the white-collar job market in coming years. I’m not sure I agree with those dire reports, but clearly AI is going to transform how white-collar workers — such as compliance and audit professionals — arc through your careers. Let’s talk about that.  One good place to start is  an interview that Dario Amodei, CEO of AI software firm Anthropic, gave to Axios  the other week. Amodei predicted that AI could wipe out half of all entry-level white-collar jobs, and cause unemployment to spike as high as 20 percent by 2030. Most people “are unaware that this is about to happen,” Amodei said. “It sounds crazy, and people just don’t believe it.” Other recent headlines do give Amodei ammunition here. Procter & Gamble has  announced that it will lay off 7,000 people , roughly 15 percent of its non-manufacturing workforce, as part of a two-year restructuring pro...

Here’s a tough one for all you compliance professionals who like to think about artificial intelligence: how would you handle an AI agent in your enterprise that, all on its own, decides to report suspected misconduct directly to regulators?  This is no longer a theoretical question; it’s a possibility embedded within Claude Opus 4, the latest AI software system developed by Anthropic, which released Claude 4 to the public last week. Anthropic also r eleased a report summarizing the testing developers performed on Claude 4  and the behavior they observed — and under certain circumstances, Claude 4 decided for itself to report suspected wrongdoing to regulators, law enforcement, and the media. To be clear, Claude 4 never actually alerted regulators to any real misconduct at real companies. This all happened in testing environments, using fake information and isolated from the real world; and the tests gave Claude 4 expanded permissions to act independently that the standard Cl...