Appeals Court Backs Pentagon Designation
A federal appeals court rejected Anthropic’s challenge to the Pentagon’s designation of the artificial intelligence company as a supply chain risk. The U.S. Court of Appeals for the District of Columbia Circuit ruled 2-1 in the government’s favor. Its decision allows the Defense Department to continue removing Anthropic’s Claude models from its systems and to bar the company’s products from work performed for the department.
Pentagon spokesperson Sean Parnell said the ruling validated the department’s position. The dispute began in February, when President Donald Trump and Defense Secretary Pete Hegseth accused Anthropic of endangering national security. CEO Dario Amodei maintained his objections because of concerns that the company’s products could be used for mass surveillance or autonomous armed drones.
Majority Focuses on Anthropic’s Conduct
According to the majority opinion, the Pentagon had ample support for its action because Anthropic acknowledged that it builds restrictions into Claude to prevent tasks the company opposes. Judge Gregory G. Katsas wrote that the department reasonably feared Anthropic could alter the model to block national-security functions that officials considered authorized and necessary. Katsas and Judge Neomi Rao formed the majority, while Judge Karen LeCraft Henderson dissented.
Although the judges did not question Anthropic’s intentions concerning privacy and AI safety, they said the relevant definition of supply chain risk depends on what the company does rather than why it acts. The majority therefore concluded that the designation did not require proof of a bad motive by Anthropic.
Separate Ruling and Practical Effects
This decision concerns a different Pentagon rule from the one examined in a separate California case. In that proceeding, a federal judge found that the department had acted illegally by punishing Anthropic for criticizing its views on AI use. The appeals court said it had no quarrel with those conclusions, but it determined that the Washington case supported the supply chain risk designation on another legal basis.
Anthropic said it respectfully disagreed and noted that another federal court had already found the parallel designation unlawful. The company remains confident in its position and is considering further review. For now, the Pentagon may continue removing Claude from its workflows and prohibit contractors from using Anthropic products on department work. The ruling does not ban those products across the entire federal government. The White House did not immediately comment.
References
Huamani, K. (2026, September 25). Federal court says Pentagon can label Anthropic a supply chain risk. AP News. https://apnews.com/article/anthropic-supply-chain-risk-lawsuit-pentagon-95c3c9874989ad6f6f52f1744dbe2245