In Latest Legal Twist, US Court Denies Anthropic's Request To Block Pentagon's Designation Of 'Supply Chain Risk'

A federal appeals court in Washington, DC denied AI company Anthropic's request to pause the Pentagon's designation of the firm as a supply chain risk, delivering a blow to the Claude developer in its ongoing legal battle with the Trump administration. The Wednesday ruling contrasts sharply with an earlier California court decision that sided with Anthropic.

The DC court's decision, reported first by Reuters, comes after a California federal judge blocked a separate Pentagon order in late March, saying the department appeared to have unlawfully retaliated against Anthropic for its AI safety views. The split decisions mean Anthropic still faces significant legal hurdles despite its earlier courtroom victory

The San Francisco injunction means non-Pentagon agencies no longer have to terminate contracts with Anthropic, but the DC decision means the Pentagon can still treat the company as a supply-chain risk and exclude it from new Pentagon contracts.

AI safety dispute

The conflict erupted after Anthropic refused to allow its Claude AI models to be used for autonomous weapons or mass surveillance of American citizens. Defense Secretary Pete Hegseth designated Anthropic as a national security supply-chain risk over its refusal to remove certain usage guardrails on its products, marking the first time a US company has received such a designation under these procurement statutes.

What's at stake

Anthropic executives have said the designation could cost the company billions of dollars in lost business and reputational harm. An Anthropic spokesperson acknowledged the setback but expressed confidence, stating the company remains certain the courts will ultimately find the supply chain designations unlawful.

The parallel legal battles will determine whether the Pentagon can effectively blacklist domestic AI companies that impose ethical restrictions on their technology.