Key Takeaways
- The U.S. Court of Appeals for the D.C. Circuit ruled 2-1 in favor of the Pentagon’s Anthropic ban.
- Anthropic received a supply chain risk designation from defense officials in March 2026.
- Claude AI systems remain prohibited from Department of Defense networks and contractor use.
- The court dismissed Anthropic’s arguments challenging the designation as unconstitutional and unreasonable.
- The AI company is weighing additional legal remedies, potentially including a petition to the Supreme Court.
The Pentagon’s blacklisting of Anthropic has survived a federal court challenge. On Friday, a three-judge panel from the U.S. Court of Appeals for the District of Columbia Circuit delivered its verdict.
Judges Gregory Katsas and Neomi Rao sided with the government. Judge Karen LeCraft Henderson issued a dissenting opinion.
The dispute stems from a March determination by defense officials. The Department of Defense designated Anthropic as a threat to the supply chaināa classification typically applied to entities with connections to hostile foreign governments.
This classification prevents the armed forces from deploying Anthropic’s Claude AI technology. Additionally, it prohibits defense industry partners from incorporating Claude into Pentagon-related projects.
Origins of the Legal Battle
Anthropic had established partnerships with multiple federal entities, including the military. The company secured a $200 million Pentagon agreement in July 2025.
Negotiations collapsed by September of that year. Military officials demanded unrestricted access to Claude for any legal application. Anthropic sought to implement guardrails, particularly concerning autonomous weapon systems and monitoring of U.S. citizens.
An impasse emerged between the parties. Defense Secretary Pete Hegseth characterized Anthropic’s position as an attempt to control military operational decisions.
In his written opinion, Judge Katsas noted that Hegseth expressed apprehension about AI systems experiencing unexpected failures. He also referenced concerns regarding potential exploitation of Claude’s capabilities. Anthropic has rejected these assertions.
Katsas determined that authority over such policy choices rests with executive branch leadership, not the judicial system.
Anthropic’s Legal Path Forward
Earlier this year, Anthropic initiated litigation in two federal jurisdictions. One lawsuit was brought in San Francisco. The other proceeded in the D.C. Circuit.
Last month, a San Francisco federal judge determined that one aspect of the Pentagon’s action violated the law. That decision stands independently from Friday’s ruling and the government has not yet appealed it.
Friday’s opinion validated a different Pentagon designation. Since the two classifications rest on distinct statutory foundations, the D.C. court’s decision does not override the California judgment.
As a result, Anthropic maintains limited ability to collaborate with certain federal entities and contractors based on the California outcome. However, the military prohibition persists.
A company representative responded to the court’s decision with a prepared statement expressing disagreement.
“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.”
The court provided Anthropic with a window before enforcement begins. The company may petition for reconsideration by the same three-judge panel. Alternatively, it could seek en banc review before all active D.C. Circuit judges.
An appeal to the Supreme Court represents another possibility.
Relations between Anthropic and the current administration have deteriorated over recent months. President Trump has publicly attacked Anthropic CEO Dario Amodei through multiple social media posts.
Emil Michael, a Pentagon undersecretary, praised Friday’s outcome online. He stated the ruling ensures private corporations cannot dictate military strategy.
Anthropic has not disclosed which avenue of appeal it will choose.
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