Anthropic loses court ruling, allowing Pentagon blacklist to proceed

The Department of Defense is allowed to blacklist Anthropic, a federal court ruled, in a stinging loss for the AI giant. If the ruling holds, Anthropic would be considered a national security risk, which may jeopardize government contracts and millions of dollars in revenue (1, 2).

• The long-running dispute began in February 2026, when Defense Secretary Pete Hegseth demanded that Anthropic permit unrestricted use of AI models by the Pentagon (2).
• Critics charged that such permission would allow the DoD to pursue wide-ranging surveillance of U.S. citizens and develop fully autonomous weapons (3).
• Anthropic CEO Dario Amodei refused to comply with the demand. In response, President Trump ordered federal agencies to stop using Anthropic's products, and Hegseth designated the firm a supply-chain risk — meaning that military contractors and suppliers cannot work with Anthropic (2, 4).
• Such a designation had previously only been used to target foreign companies that the government believed threatened national security. Hegseth's order represented the first time it had been used against a domestic, U.S.-headquartered company (4).
• In March, Anthropic filed two lawsuits against the government seeking to overturn the supply-chain risk designation — one in California, where the company is based, and one in D.C. (2).
• It won the former challenge last month, with a judge ruling that the government's retaliation against Anthropic was illegal (5).
• However, the D.C. lawsuit resulted in defeat. The D.C. Court of Appeals claimed that the DoD "had ample support for its conclusion" that using Anthropic could risk national security (1).
• As such, Anthropic remains banned from working with the Pentagon or any Pentagon contractor (4).
• The court also threw cold water on Anthropic's assertion that its due-process and First Amendment rights were violated, labeling its claims "without merit" (1).
• The court split 2–1 in the ruling. Judges Neomi Rao and Gregory G. Katsas — both appointees of President Trump — formed the majority. Judge Karen L. Henderson, a George H. W. Bush appointee, dissented (1, 4).
• Anthropic may appeal the decision or ask for a review by the full panel of 11 D.C. appeals court judges (4).

Sources & Further Reading

1. Anthropic v. United States Department of War. D.C. Court of Appeals. September 25, 2026.
2. "A Timeline of the Anthropic-Pentagon Dispute." Tech Policy Press. February 25, 2026.
3. "Anthropic boss rejects Pentagon demand to drop AI safeguards." BBC. February 27, 2026.
4. "Trump Administration’s Blacklisting of Anthropic Was Legal, Judges Rule." New York Times. September 25, 2026.
5. "Trump Administration’s Blacklisting of Anthropic Was Illegal, Judge Rules." New York Times. August 27, 2026.