A federal appeals court rejected Anthropic’s challenge to a Pentagon decision labeling the artificial intelligence company a national security supply-chain risk Friday, handing the Trump administration a legal victory in its monthslong fight with the company.
“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,” reads the ruling from the D.C. Circuit Court of Appeals in its 2-1 decision.
The court pointed to Anthropic’s ability to build restrictions into its models and previous instances in which Claude refused tasks requested by government users.
The dispute began in February, after negotiations between Anthropic and the Pentagon broke down over the department’s demand that its Claude models be available for any lawful purpose, including uses that conflicted with the company’s restrictions on mass domestic surveillance of Americans and fully autonomous weapons.
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But the Friday ruling does not reverse a separate decision last month that struck down other administration actions against Anthropic.
“We respectfully disagree with the court’s decision,” an Anthropic spokesperson said in a statement to The Washington Sun. “Another federal court has already held the government’s parallel designation unlawful. We remain confident in our position and are considering all options, including further review.”
The Pentagon did not immediately respond to a request for comment.
The Defense Department designated Anthropic a supply-chain risk under two federal laws, leading to separate court challenges for each.
One designation, issued under a Pentagon-specific law known as Section 3252, was part of Anthropic’s broader lawsuit against the administration in federal court in California. U.S. District Judge Rita F. Lin struck down that designation in August, along with other administration actions aimed at cutting off Anthropic from federal work.
The Pentagon also designated Anthropic a supply-chain risk under the Federal Acquisition Supply Chain Security Act, a separate law governing risks to the federal government’s supply chain. Anthropic challenged that designation directly in the D.C. Circuit.
The appeals court also directly addressed Lin’s ruling. It said the law at issue in her case has a narrower definition of a supply-chain risk that required evidence of bad intent, while the law at issue in Friday’s decision does not.
The court acknowledged that Anthropic imposed its restrictions over concerns about privacy and AI safety, rather than an intent to harm the government. But it said Anthropic’s motives did not matter in this case.
The law, the court said, “turns on what Anthropic does, not why Anthropic does it.”
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