DC Appeals Court Upholds Pentagon Ban on Anthropic AI

The U.S. Court of Appeals for the District of Columbia Circuit ruled 2-1 on Friday that the United States Department of Defense acted legally in designating AI startup Anthropic PBC as a national security supply-chain risk. The decision allows the Pentagon to remove Anthropic's Claude models from its systems and prohibits defense contractors from using the company's products for military work.

The dispute began in February 2026 after Anthropic refused a demand from Secretary of Defense Pete Hegseth to remove safety restrictions that prohibit the use of Claude for mass domestic surveillance and fully autonomous lethal weapons. The government argued these internal code restrictions could prevent the AI from performing essential national-security functions during military operations. The conflict followed a breakdown in negotiations for a $200 million prototyping deal and an incident involving the use of Claude during the capture of Venezuelan President Nicolas Maduro.

While the D.C. court found the government had ample support for its conclusion, the ruling exists alongside a conflicting decision from a California federal court. That court previously found that other administration actions, including a government-wide ban by President Donald Trump, were unlawful retaliation against Anthropic for its views on AI safety. However, the D.C. Circuit clarified that a bad motive is not required for a supply-chain risk designation.

Anthropic stated it disagrees with the ruling and is considering further judicial review, including a possible appeal to the U.S. Supreme Court. The Pentagon has since replaced Anthropic's technology with models from competitors including OpenAI, xAI, Google, and Microsoft.