The US Court of Appeals for the District of Columbia Circuit has denied AI firm Anthropic’s request to temporarily halt the Pentagon’s designation of the company as a national security supply chain risk.
In a ruling on Wednesday, a three-judge panel rejected Anthropic’s emergency motion, stating that the government’s need to secure AI technology during an active military conflict outweighs any financial or reputational damage the company might face.
As a result, the Defense Department’s classification of Anthropic’s products as a “supply-chain risk to national security” remains in effect. The designation—reportedly the first of its kind applied to a US company—also prevents Pentagon contractors from using Anthropic’s AI models.
The move could set a significant precedent for other tech firms, particularly those that do not align with government requirements.
“In our view, the equitable balance here cuts in favor of the government,” the panel wrote.
“On one side is a relatively contained risk of financial harm to a single private company. On the other side is judicial management of how, and through whom, the Department of War secures vital AI technology during an active military conflict.”
Challenging the label across two courts
The dispute traces back to a July 2025 agreement between Anthropic and the Pentagon to make its Claude model the first large language model approved for use on classified networks.
Talks broke down in February, however, after the government pushed to renegotiate terms, seeking unrestricted military use of Claude. Anthropic resisted, arguing that its technology should not be deployed for lethal autonomous weapons or mass domestic surveillance.
In late February, US President Donald Trump directed federal agencies to stop using Anthropic products, criticizing the company for attempting to “strong-arm” the Defense Department.
Anthropic responded in March by suing the Trump administration, calling the move an “unlawful campaign of retaliation.”
Later that month, the US District Court for the Northern District of California issued a preliminary injunction against the Pentagon’s designation and temporarily blocked the president’s directive, describing it as “Orwellian.”
However, due to the structure of federal procurement law, Anthropic was required to challenge the designation on two separate legal fronts: one in California on constitutional grounds, and another directly before the D.C. Circuit under the statute authorizing the designation.
While the appellate court acknowledged that Anthropic is likely to suffer some degree of irreparable harm without relief, it emphasized the need for expedited proceedings.
Acting US Attorney General Todd Blanche described the decision on X as a “resounding victory for military readiness.”
“Military authority and operational control belong to the Commander-in-Chief and Department of War, not a tech company.”
