Appeals court backs Pentagon’s Anthropic supply-chain ban
A three-judge panel on the US Court of Appeals for the DC Circuit upheld the Defense Department's designation of Anthropic as a supply chain risk, preserving a Pentagon ban on its AI products. The ruling applies to Defense Department use and contractors, while a separate California case has blocked a broader federal contract ban. Anthropic said it disagrees and is weighing further review, and a Pentagon technology official praised the decision.
The D.C. Circuit panel split 2-1. Judges Gregory Katsas and Naomi Rao found the Defense Department had enough basis to conclude that putting Claude into its systems or contractors’ work created a covered security concern. Judge Karen Henderson dissented, saying FASCSA targeted foreign sabotage, not a U.S. company’s internal restrictions.
The decision affects only Pentagon use and defense contractors. A separate Northern District of California ruling blocked a broader federal contract ban. Anthropic says it disagrees and may seek further review; Pentagon CTO Emil Michael welcomed the outcome.
The ruling may shape how AI vendors with usage limits interact with defense procurement. Pentagon personnel and contractors using Anthropic tools could face disruption, while other AI suppliers may reassess contractual terms and safety policies. Because a California case still blocks a broader federal ban, the practical reach may remain uneven across agencies. Appeals could prolong uncertainty for government buyers and AI firms.