Appeals Court Upholds Pentagon Blacklisting of AI Firm Anthropic

The U.S. Court of Appeals for the District of Columbia Circuit refused to block a United States Department of Defense designation of AI firm Anthropic as a national security supply-chain risk. The ruling allows the Pentagon to continue barring the company from military contracts and prohibits defense contractors from using the Claude AI system for government work. The court stated that the government's need to secure vital technology during an active military conflict outweighs the potential financial harm to the private company.

The dispute began in early 2026 after Secretary of Defense Pete Hegseth designated the firm a risk because Anthropic refused to remove safety guardrails that prevent its technology from being used for mass surveillance or fully autonomous weapons. President Donald Trump accused the company of attempting to dictate military policy and set a six-month deadline for the defense department to transition away from the Claude platform. Following the blacklist, OpenAI secured a deal to provide AI services to the government.

This decision contradicts a previous ruling by U.S. District Judge Rita Lin in San Francisco, who granted a preliminary injunction and found the blacklisting was likely a form of First Amendment retaliation. While the appeals court denied a stay, it agreed to expedite the case and scheduled oral arguments for May 19. Acting Attorney General Todd Blanche described the ruling as a victory for military readiness, while Anthropic maintains the designations are unlawful and retaliatory.