Court Backs Pentagon's Anthropic Supply-Chain Risk Label
A federal appeals court in Washington, D.C., upheld the Pentagon's decision to classify Anthropic as a supply chain risk. The Defense Department issued that designation in March, and Anthropic sued the Trump administration to challenge it. The ruling blocks the U.S. military and defense contractors from using Anthropic's models in defense work, and Anthropic said it is considering its options.
The D.C. Circuit panel split 2-1, with Judges Gregory Katsas and Neomi Rao in the majority and Judge Karen LeCraft Henderson dissenting. The majority concluded the Defense Department had enough grounds to find that keeping Claude in its systems, whether directly or through contractors, raised a national-security concern covered by statute.
The designation followed failed talks over how the military might use Claude, and it bars both the armed services and defense contractors from relying on those models for agency work. Anthropic signaled it still believes its case is strong and may seek additional review. CEO Dario Amodei has recently urged a broader industry slowdown, while President Trump has criticized him publicly.
The ruling could immediately affect U.S. military and defense contractors by removing Claude from defense-related workflows, potentially forcing them to shift to alternative AI tools or pause projects. It may also shape how AI vendors assess government contracts, encouraging stricter compliance and risk planning. Anthropic's customers outside defense may watch for reputational or market effects, while policymakers could face renewed debate over balancing security reviews with access to advanced AI.