A federal appeals court in Washington, D.C., on September 25 upheld the Pentagon's designation of Anthropic as a supply chain risk, sustaining a ban that blocks the U.S. military and its contractors from using the company's Claude models1,2.
The 2-1 ruling rejected Anthropic's argument that DOD's action was arbitrary, unauthorized, and unconstitutional. Circuit Judge Gregory Katsas, joined by Circuit Judge Neomi Rao, wrote that "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". Circuit Judge Karen LeCraft Henderson dissented.
DOD labeled Anthropic a supply chain risk in March. The practical effect bars the U.S. military from deploying Anthropic's models and prevents defense contractors from incorporating them into agency work. Anthropic sued the Trump administration to reverse the designation.
A San Francisco federal judge ruled last month that one designation was illegal, but the D.C. appeals court upheld a second designation on September 25.
"We remain confident in our position and are considering all options, including further review," an Anthropic spokesperson said.
ANALYSIS The ruling narrows Anthropic's path to regaining access to the defense market, with the appeals court siding with DOD on the national-security rationale.