Anthropic loses appeal over Pentagon supply chain risk designation

On Friday, a federal court panel in Washington D.C. validated the Pentagon’s blacklisting of Anthropic, delivering a major setback to the AI firm in its months-long struggle with the Trump administration. The 2-1 decision rejected Anthropic’s argument that the Department of Defense’s ban on its Claude models was unlawful or unconstitutional.

In this connection, Judge Gregory Katsas wrote in the majority opinion for the US court of appeals for the district of Columbia, “The Department had ample support for its conclusion that the continued integration of Claude into the Department’s information systems, by the Department or its contractors, presented a statutorily covered national-security risk.”

The DOD label Anthropic a national security threat listing means the company ostensibly imperiled American sovereignty after negotiations about how the military could use its Claude AI models spun out of control. The designation prevents the US military from using Anthropic's models and prohibits defense contractors from using them in their work with the agency.

Anthropic served as a cross-agency collaborator across many US agencies including the DOD.

The company signed a $200 million contract with the Pentagon in July 2025 but initiated talks for the integration and deployment of Claude on the DOD’s AI platform in September when talks collapsed.

Furthermore, the DOD wanted Anthropic to provide unrestricted defense integration of its models for all lawful purposes while Anthropic demanded a pledge that its technology would not be used for autonomous weapons or domestic mass surveillance.