Appeals Court Upholds Anthropic National Security Risk Designation

The U.S. Court of Appeals for the District of Columbia Circuit ruled 2-1 on Friday that the U.S. government may legally designate Anthropic as a supply chain risk. The decision allows the Pentagon to remove the company's Claude models from its systems and prohibit the use of its products for Department of Defense work, effectively barring the AI startup from all military contracts.

The court found that the government had ample support for its conclusion, specifically citing internal code restrictions that prevent Claude from performing certain tasks. These restrictions were implemented by Anthropic to prevent its technology from being used for mass domestic surveillance or autonomous lethal weapons. The conflict escalated in February after President Donald Trump accused the company of endangering national security, leading to a dispute over a $200 million contract.

This ruling contradicts a separate decision from a California court this summer, which found the Pentagon acted illegally by punishing Anthropic for criticizing government views on AI. Anthropic stated it respectfully disagrees with the appeals court's decision and is considering further review as it prepares for a potential initial public offering.