The 2-1 ruling blocks the AI company’s models from being used by the US military and its contractors, marking a significant setback for Anthropic in its ongoing battle against the Trump administration’s blacklisting.
The majority opinion, delivered by Judges Gregory Katsas and Neomi Rao, concluded that the Department of Defense had “ample support” for its determination that Anthropic’s Claude models posed operational risks, according to a report by CNBC. A federal appeals court in Washington, D.C has sided with the Pentagon, affirming its designation of Anthropic as a ‘national security risk’. Judge Karen LeCraft Henderson dissented, arguing the designation was overly broad.
The ruling expands the power of the executive branch to blacklist U.S. businesses, and stems directly from Anthropic’s refusal to loosen restrictions it maintains on how its Claude models can be used — specifically its stated policy against allowing its AI to be used for autonomous weapons or mass domestic surveillance The conflict between Anthropic and the Trump administration grew out of a $200 million contract dispute over how the Pentagon could deploy Claude on classified systems. On February 27, the Pentagon gave Anthropic a 5 p.m. deadline to comply with its demands that the government be able to use the service as it saw fit. Because the company builds code into its models restricting certain tasks, the US Court of Appeals for the District of Columbia Circuit ruled 2-1 that the Defense Department had good reason to conclude that Anthropic’s AI products pose a supply chain risk to the department and its contractors,.
Before that deadline passed, President Trump announced that no government workers would be allowed to use Anthropic, and Defense Secretary Pete Hegseth subsequently labeled the company a supply-chain risk, a designation that effectively blocks Anthropic from any government contracts and is more typically reserved for companies tied to foreign adversaries.
Writing for the majority, Judge Gregory Katsas said the Department of Defense had adequately demonstrated that keeping Claude embedded in its information systems created a risk to national security covered by statute. The court also rejected Anthropic’s argument that the Pentagon’s action was retaliatory, tied to the company’s stance on AI safety and ethics rather than legitimate security concerns.
Anthropic Faces Military Demands for AI Model Access
The U.S. Defense Department has instructed Anthropic to ensure its AI models are accessible for any lawful military applications without limitations. In response, Anthropic is seeking formal assurances that its AI system, Claude, will not be utilized in fully autonomous weapon systems.