Good morning. Anthropic Chief Executive Dario Amodei has apologized for a leaked memo in which he questioned the Trump administration’s motives for declaring his artificial-intelligence company a supply-chain risk and severing its government relationships. But Amodei said Anthropic would challenge the designation in court.

• Pentagon's formal warning: The Defense Department on Thursday formally notified Anthropic’s leadership that the company and its AI tools present security threats, a senior Pentagon official said.
   
• Pentagon balks at restrictions: The official said the military wouldn’t allow a vendor to insert itself into the chain of command and put members of the armed services at risk by restricting the lawful use of a critical capability.
   
• Knock-on effects: The move could have far-reaching consequences for Anthropic partners and investors including Lockheed Martin, Amazon.com and Google. It is one of the first times the supply-chain risk designation has been applied to a U.S. company, a move that some warn could have a chilling effect on other businesses wanting to do business with the government.

Unpredictable political risk may be new ‘operating model.’

The political back-and-forth in Washington prompting companies to quickly change vendors and vet policies may be the “new operating model,” top in-house lawyers for Lockheed Martin and SAP NS2 said at the Dow Jones Risk Journal Summit.

“The speed at which policy is being made is unprecedented,” Kevin O’Connor, general counsel for Lockheed Martin, said at the conference on Wednesday. “The use of executive orders, which goes back a couple presidents, it’s never been really done at this pace and it really poses a challenge for all businesses.”

• As businesses increasingly rely on artificial intelligence to produce legal summaries and research, there will be less immediate demand for hires fresh out of law school, corporate experts said.
   
• Many companies are still moving forward with their sustainability goals even as they have stopped publicly promoting them.
   
• AI is coming for Big Law.

Trump administration sued by states over latest global tariff regime.

A coalition of two dozen states filed a lawsuit Thursday challenging a new global tariff that President Trump imposed after a set of levies issued under a different legal authority were struck down by the Supreme Court.

The lawsuit, filed in the Court of International Trade, says the new 15% global tariff announced by Trump is illegal, accusing the president of misapplying a 1974 law to impose it.

• Stablecoins are starting to catch on among some crypto users as a way to park money and earn yields—a development that banks are determined to stamp out before it gets any bigger.
   
• The Federal Communications Commission proposed new rules Thursday that could require phone, internet and cable companies to disclose a customer service agent’s location, cap the share of such calls that happen with overseas agents and give consumers the option to be served by a U.S.-based agent.
   
• Canada says OpenAI Chief Executive Sam Altman has agreed to take immediate steps to strengthen safety protocols regarding notifying police about potentially suspicious use of the company’s ChatGPT chatbot.
   
• Meta Platforms said it will let rival artificial-intelligence chatbots communicate with users on its WhatsApp messaging platform after the European Commission said it could impose a temporary injunction on the company as part of an antitrust probe into its AI policy.
   
• British digital bank Revolut said it filed an application for a national bank charter in the U.S., joining a wave of fintech firms seeking to expand in the country under the Trump administration.

‘Decapitate and delegate’: Trump tests new model of U.S.-led regime change.

President Trump is betting his legacy on a new playbook for U.S.-led regime change: We bomb, you decide.

In Venezuela, Trump ousted autocrat Nicolás Maduro but left the rest of his leadership intact, with his administration saying it will be up to Venezuelans to push for a democratic transition.

• Shipping disruptions in the Strait of Hormuz and Iranian strikes on critical infrastructure are threatening the global supply of aluminum.
   
• Canada’s minister in charge of U.S.-Canada trade will head to Washington Friday for talks on the pending White House review of the existing trilateral North American trade pact.
   
• Missiles keep getting in the way of flights in the Gulf.
   
• Saudi Arabia is starting to shift crude exports to its Red Sea hub at Yanbu as disruptions in the Strait of Hormuz constrain Gulf shipments.
   
• For the first time, the U.S. sided with Russia and China on Thursday in a dispute at the United Nations atomic agency over the danger posed by attacks on Ukraine’s nuclear power, showing Washington’s increasing alignment with Moscow.
   
• Prolonged geopolitical tensions in the Middle East could disrupt South Korea’s chip industry.
   
• Lysol maker Reckitt Benckiser halted production at a plant in Bahrain, its chief executive said, the latest company to suffer disruption as the conflict in the Middle East escalates.

• President Trump ousted Kristi Noem as secretary of the Department of Homeland Security, saying Thursday he would replace her with Republican Sen. Markwayne Mullin of Oklahoma.
   
• The U.S. looks to tap Venezuela’s lawless mineral frontier.
   
• Delta Air Lines is shaking up the top leadership team following the retirement of its longtime president and the upcoming departure of its operations chief.
   
• AI-generated writing is everywhere, and it’s still easy to spot—for now
   
• Among the American servicemembers who were killed in Kuwait were devoted parents, a student, a member of a military family and a “life of the party.” They came from California, Florida, Iowa, Minnesota and Nebraska.