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A federal judge in California has ruled in favor of Anthropic in its case against the Department of Defense, granting a temporary injunction against the government's punitive measures. The standoff revolves around Anthropic's refusal to allow the Pentagon to use its Claude AI model for autonomous lethal weapons or domestic mass surveillance.Judge Rita Lin found that the government overstepped its authority in designating Anthropic as a 'supply chain risk,' stating that this move was 'likely both contrary to law and arbitrary and capricious.' The judge questioned the government's rationale, suggesting that their actions seemed aimed at crippling Anthropic.Anthropic argued that the government's actions violated its First Amendment rights and could cost the company hundreds of millions or even billions of dollars. The injunction has significant implications for the government's efforts to replace Claude with other AI tools, particularly given its extensive use in military operations, including target selection and analysis of missile strikes.

The UK government has unveiled a new policy to prioritise British suppliers for public contracts in key sectors deemed vital to national security. Shipbuilding, steel, AI, and energy infrastructure will be the primary areas where British suppliers will be given preference. Under the new guidance, departments will be required to use British steel or justify sourcing it from overseas. This move is part of a broader effort to bolster national security and economic resilience, particularly in the face of global supply chain disruptions highlighted by the war in the Gulf. A Public Interest Test will also be introduced, obliging departments to assess whether outsourced service contracts over £1m could be delivered more effectively in-house. This test is expected to cover more than 95% of central government contracts by value. Chris Ward, a Cabinet Office minister, emphasised that these reforms aim to support British jobs, protect national security, and grow the economy. The policies are part of the National Security Strategy, which seeks to align national security with economic growth and build the resilience of British supply chains. While the UK is still subject to international obligations such as the Agreement on Government Procurement (GPA) – World Trade Organisation (WTO) rules, national security exemptions are being utilised to implement these new rules. Larger departments spending over £100m annually will need to publish an “insourcing” strategy, outlining plans to bring services back in-house where they offer better value. The government will also prioritise community impact in buying decisions, encouraging firms to demonstrate how their bids will create local jobs and apprenticeships. Additionally, a new suite of AI tools has been developed to streamline the commercial process, making it simpler, faster, and fairer for small businesses and charities to bid for work.

The US-Israel war on Iran has effectively closed the Strait of Hormuz, a critical shipping route for materials used in the production of various everyday products. As the conflict enters its fifth week, global oil shortages are forcing countries to take severe measures to conserve their reserves. While US gas prices have surged to their highest level in years, the impact of rising oil prices extends far beyond drivers. Oil is a crucial component in the supply chain, powering machines that manufacture goods and fueling trucks that transport them to stores. The price increases come at a time when many Americans are already strained by rising housing costs, grocery bills, and electricity statements. A recent Gallup poll found that a third of Americans have had to skip meals and forego other needs to afford their healthcare. Oil and Gas The average cost of gas in the US has jumped about 30% over the last month, with the national average hitting $3.97, the highest since 2023. Diesel, which fuels many trucks transporting goods, has increased by about 50%, or $1.69 more than it did a year ago. Higher diesel costs could soon affect transportation costs and grocery prices, as roughly 85% of agricultural goods are transported by trucks. The impact of oil and gas shortages on the supply chain can be categorized as first-order effects, such as higher prices at the gas pump, and second-order effects, including potential price increases for crops, semiconductor chips, and medical devices. Fertilizer Farmers are struggling as the spring growing season approaches, facing higher fertilizer costs and falling commodity prices. A third of global urea trade, a solid nitrogen fertilizer, passes through the Middle East region, with about 20% of imported fertilizer to the US coming from Qatar. Nitrogen fertilizer is critical to grow corn, which is cultivated by about 500,000 farmers in the US. The White House has promised to minimize disruptions to the US economy, with alternative sources of fertilizer being sought from around the world. Helium The conflict has disrupted the global helium supply after Iranian attacks in Qatar, the second-largest producer of helium after the United States. Helium is a key import used in aerospace, magnetic resonance imaging (MRI), and semiconductor chips that power AI. Jet Fuel Increases in oil prices could result in higher airfare and shipping costs. The price of jet fuel has doubled since the start of the war, according to the International Air Transport Association. United Airlines announced last Friday that it would have to cut flights due to the surging cost of fuel. < h2>Mortgage Rates Just as US mortgages were starting to fall in February, the average 30-year fixed mortgage rate ticked up to its highest level in months, reaching 6.22%. Mortgage rates are closely tied to the overall state of the economy, and the US Federal Reserve's decision to leave rates unchanged last week cited uncertainty in the economy, particularly with conflict in the Middle East.

Retailer Next has reported a £1.16bn pre-tax profit for the full year, with the Middle East conflict expected to add only £15m to fuel and air freight costs. This amount, which assumes a three-month disruption, is considered minimal and can be offset by savings elsewhere.Chief Executive Simon Wolfson added £8m to this year's profit forecast as a mechanical read-through from last year's outcome, indicating that trading had been “encouraging” in the UK and “strong” overseas until late February.The main concern for Next is the potential long-term impact of the conflict on supply chain resilience, freight rates, factory gate prices, and consumer demand. Wolfson emphasized that the company has no insight into the duration and implications of the conflict, stating, “As yet, we have no feel for the medium-term effects”.If higher costs persist, Next may put up prices, but this remains “a contingency, not a plan”. The company will provide a clearer view in its first-quarter update in May.Wolfson also offered nuanced insights, suggesting that consumer confidence may not have collapsed as much as some, like the British Retail Consortium, have claimed. He noted that UK consumers tend to react to actual higher prices, not the threat of them.Additionally, Next's spring-summer ranges are already in stores, online, and warehouses, minimizing the immediate need for adjustments. Any increases in fabric costs or production disruptions in Asian factories would mostly affect autumn-winter ranges.The stock market responded positively, with Next's shares rising 5% to £125.40. This resilience could indicate potential for a profit upgrade in May if the £15m in extra costs turns out to be the worst of it.However, no retailer will be immune if the energy price shock persists and the OECD's prediction of UK economic growth of just 0.7% this year materializes.

The UK government has announced a significant intervention in the country's industrial sector, investing £100m to reopen a carbon dioxide plant on Teesside. The Ensus plant, which was mothballed in September, will restart operations for an initial three-month period, with hopes that it could then remain open indefinitely.The decision to reopen the plant comes amid concerns that the war in Iran could trigger shortages of CO2, a gas that has various uses ranging from carbonating drinks and keeping food fresh to medical procedures and the sedating of animals for slaughter. The plant's reopening is expected to bolster production of CO2 and help ensure the resilience of supply chains.The Business Secretary, Peter Kyle, approved the reopening of the plant, stating that the government would 'always do what's needed to ensure resilience and protect British businesses from the worst impacts of global uncertainty.' The move is part of wider government efforts to ensure the UK maintains access to critical industrial resources during global supply shocks.The UK's food and drink industry faced a CO2 crisis in 2021, after the easing of pandemic restrictions sent the price of wholesale gas soaring, pushing up the manufacturing costs of fertiliser production, which also produces the gas as a byproduct. The crisis resulted in the government providing a temporary bailout to the American company CF Fertilisers to help restart CO2 production at its Teesside factory.The Ensus plant has had operations on Teesside since 2010, using distillation and fermentation to convert wheat into bioethanol. CO2 is a byproduct of this process, as well as high-protein animal feed. The company, which is headquartered in Middlesbrough, employs about 100 people.

UK clothing and homeware retailer Next has issued a warning that the ongoing conflict in the Middle East could lead to increased costs and potential price hikes. The company expects the conflict to add £15m to its costs over the next three months.Next stated that it is currently offsetting additional costs on fuel and air freight with savings elsewhere, and it does not expect any impact on profits for the year ahead. However, if the conflict persists beyond three months, prices will have to go up.The company has upped its profit guidance by £8m to £1.2bn for the year to January 2027, following better-than-expected sales in January. Next also noted that sales in the Middle East, which account for 6% of group turnover, could be adversely affected until the summer.Next's pre-tax profits rose 14.5% to £1.16bn in the year to January, with sales increasing by almost 11% to £7bn. The company is focused on cutting costs, including the increased use of AI in warehouse operations to improve efficiency.The retailer has increased its stock holdings by 6% to protect against potential supply chain delays. Next also noted that the conflict's impact on supply chain resilience, freight rates, factory gate prices, and consumer demand is uncertain and will depend on the conflict's duration and its impact on the world's energy infrastructure.

Anthropic, a leading artificial intelligence company, is set to face off against the US Pentagon in a San Francisco court over a ban that prevents the military from using its Claude AI model. The company refused to remove safety guardrails that prevent its AI from being used for fully autonomous weapons and mass domestic surveillance.The legal showdown began on Tuesday, with US District Judge Rita Lin presiding over the hearing. Anthropic argues that the Pentagon's move is an unprecedented and unlawful designation that violates freedom of speech protections and due process rights.The Pentagon-led ban was enacted after Anthropic refused to strip safety guardrails from its AI model. The company's designation as a national security supply chain risk prohibits anyone within the Defense Department or its contractors from using the technology.Legal experts believe that Anthropic is likely to prevail, pointing to a February 27 post on X in which Defense Secretary Pete Hegseth said he is directing the DoD to designate Anthropic a Supply-Chain Risk to National Security. The post also said that contractors, suppliers, or partners for the United States military are prohibited from commercial activity with Anthropic.The White House has pushed back on Anthropic's claims that government action violated free speech protections under the First Amendment of the US Constitution, saying the dispute stems from contract negotiations and national security concerns rather than retaliation.Democratic Senator Elizabeth Warren of Massachusetts has penned a letter to Hegseth voicing her concerns, saying she is particularly concerned that the DoD is trying to strong-arm American companies into providing the Department with the tools to spy on American citizens and deploy fully autonomous weapons without adequate safeguards.

The Iran war is threatening to disrupt shipping of crucial parts manufactured in the Gulf, potentially delaying large offshore wind projects in Europe. Industry sources are concerned that components ordered from suppliers in the United Arab Emirates could become trapped if shipping remains effectively blocked through the strait of Hormuz.These projects include two giant offshore windfarms planned for UK waters, as well as a series of projects that will supply offshore wind power to Germany and the Netherlands. The UK windfarms, which will lie off the coast of Norfolk, were each awarded a 20-year support contract from the British government just a month before Iran effectively closed the strait of Hormuz.The developer behind the plans, the German renewables group RWE, has contracted a Dubai-based company to deliver more than 180 components from its UAE fabrication yard while the windfarms are constructed. The windfarms are expected to supply the equivalent of about 4m UK homes before the end of the decade, meaning they would play an important part in supporting Britain’s aim to quadruple offshore wind capacity by 2030.A spokesperson for RWE said it had begun liaising closely with its supply chain partners amid the Middle East conflict, which has included airstrikes against key infrastructure. “Our primary focus is the safety of those working in the area,” they said. “To date there has only been a limited effect on our supply chain partners’ activities, but we are monitoring the situation closely and putting mitigation plans in place should the situation continue for a prolonged period.”The shutdown of the strait may also have an impact on a large project by the transmission operator TenneT that will link offshore wind projects in the German North Sea to mainland Germany. The company has contracted a UAE fabrication yard to deliver structural steel components, including a 5,461-tonne jacket foundation built for the BorWin6 high-voltage transmission project.

The global food system is facing an unprecedented threat of collapse, much like the financial system did in 2008. The concentration of power in the hands of a few large corporations has led to a loss of diversity, redundancy, and modularity, making the system highly vulnerable to shocks.Recent data suggests that every part of this system is now highly concentrated in the hands of a few corporations, which have been consolidating both vertically and horizontally. One recent study found that the US food system has “consolidated nearly twice as much as the overall economic system”. Some of these corporations, diversifying into financial products, now look more like banks than commodity traders, but without the same level of regulation.These vulnerabilities are exacerbated by the use of just-in-time supply chains and the funnelling of much of the world’s trade through a number of chokepoints. Some people have long warned that the strait of Hormuz, alongside the Suez canal, Turkish straits, Panama canal and straits of Malacca, are critical chokepoints, whose obstruction would threaten the flow of food, fertiliser, fuel and other crucial agricultural commodities.When a system has lost its resilience, it’s hard to predict just how and when it could go down. The collapse of one corporation? The simultaneous closure of two or more chokepoints? A major IT outage? A severe climate event coinciding with a geopolitical crisis? The next step could be contagious bankruptcy and cascading failure across sectors.We know what needs to happen: break up the big corporations; bring the system under proper regulatory control; diversify our diets and their means of production; reduce our dependence on a handful of major exporting countries; build strategic food reserves, accessible to people everywhere. But there’s a problem, and it’s not just Trump. Almost all governments are beholden to corporate and financial power.The best we can hope for is that braver politicians in our own countries seek to insulate us from the worst impacts. A crucial step is to encourage a shift to a plant-based diet. People struggle to see the relevance, but it’s simple. A plant-based diet requires far fewer resources, including just a quarter of the land a standard western diet requires and much less fertiliser and other inputs.