A federal appeals court has cleared the Pentagon to continue treating Anthropic as a supply chain risk, allowing the Defense Department to keep removing the company’s Claude AI models from its systems and bar contractors from using Anthropic products for department work.
The U.S. Court of Appeals for the District of Columbia Circuit ruled 2-1 Friday in favor of the Pentagon, according to reporting adapted from the Associated Press.
“Today’s DC Circuit Court ruling completely validates the Department’s position,” Pentagon spokesman Sean Parnell wrote in a social media post.
Why the Pentagon Prevailed
The dispute began in February, when President Donald Trump and Defense Secretary Pete Hegseth accused Anthropic of endangering national security and designated the company a supply chain risk.
Anthropic CEO Dario Amodei had resisted over concerns that the company’s products could be used for mass surveillance or autonomous armed drones, according to the source report.
In the majority opinion, Judge Gregory G. Katsas wrote that the Pentagon had “ample support” for its action. The court pointed to Anthropic’s own acknowledgement that it builds restrictions into Claude to stop the model from performing tasks the company does not want it to perform.
“The Department reasonably feared that Anthropic might manipulate Claude’s design to prevent it from performing national-security functions that the Department deems contractually authorized and necessary,” Katsas wrote.
Judges Split on the Risk Label
Katsas and Judge Neomi Rao, both nominated by Trump, formed the majority. Judge Karen LeCraft Henderson, who was nominated by President George H. W. Bush, dissented.
The majority said it had “no reason to doubt” that Anthropic’s restrictions were motivated by “noble intentions,” including privacy and AI safety concerns. But the judges said the supply chain risk question turned on “what Anthropic does, not why Anthropic does it.”
Anthropic Points to Separate Court Win
An Anthropic spokesperson said the company “respectfully disagrees” with the ruling.
“Another federal court has already held the government’s parallel designation unlawful,” the spokesperson said. “We remain confident in our position and are considering all options, including further review.”
That separate case, filed in San Francisco, produced a ruling this summer in which a federal judge found the Pentagon acted illegally by punishing Anthropic for criticism of the department’s views on AI use. The D.C. case centered on a different rule the Pentagon used to support the supply chain risk designation.
The D.C. Circuit majority said it had “no quarrel” with the California court’s conclusions, but found that proving a “bad motive” by Anthropic was not necessary to uphold the supply chain risk label.
What the Ruling Does — and Does Not Do
The decision upholds the Pentagon’s ability to remove Claude from Defense Department workflows and prohibit contractors from using Anthropic products in department work.
The ruling does not bar Anthropic’s products from the entire federal government.
