Anthropic’s appeal fails; Pentagon’s “supply chain risk” designation stands

According to CoinTelegraph, the U.S. District of Columbia Court of Appeals rejected AI company Anthropic’s emergency motion, upholding the Department of Defense’s designation of Anthropic as posing a “national security supply chain risk.” The three-judge panel ruled that the government’s interest in controlling AI technology during military conflicts takes precedence over any potential financial or reputational harm Anthropic might suffer. This label—previously never applied to a U.S.-based company—will bar Pentagon contractors from using Anthropic’s Claude models. The dispute originated from a contract signed between the two parties in July 2025; negotiations collapsed in February 2026—when the government demanded Anthropic permit unrestricted military use of Claude, while Anthropic refused to allow its use in lethal autonomous weapons or domestic mass surveillance. Subsequently, Trump ordered all federal agencies to fully suspend use of Anthropic’s products, prompting Anthropic to file a lawsuit in March. The case is currently proceeding simultaneously in both the U.S. District Court for the Northern District of California and the U.S. District Court for the District of Columbia.