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U.S. appeals court upholds Pentagon designation of Anthropic as supply chain risk

The 2-1 ruling lets the Pentagon keep Anthropic off contracts after judges said Claude’s built-in limits could pose a supply-chain risk.

  • On Sept. 25, the Columbia Circuit Court ruled 2-1 to uphold the Pentagon's designation of Anthropic as a national-security supply-chain risk, allowing the Government to bar the AI company from future defense contracts.
  • The Pentagon designated Anthropic a national-security risk earlier after the company refused to remove code preventing Claude from performing autonomous warfare and domestic surveillance, prompting Anthropic to sue the Government.
  • Circuit Judge Gregory Katsas, joined by Circuit Judge Neomi Rao, wrote that the Pentagon had sufficient reason to label Anthropic's AI a supply-chain risk, rejecting claims the label violated free speech protections.
  • Anthropic claims the designation cost it billions and damaged its reputation ahead of a planned initial public offering, stating it remains confident in its position and is considering further legal review.
  • Circuit Judge Karen LeCraft Henderson dissented, arguing the law does not cover a contractor's "honest and upfront enforcement of restrictions," while a federal judge in San Francisco previously struck down a parallel designation.
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In conflict with the U.S. Department of Defense for its "security risk" classification, the U.S. company Anthropic has suffered a legal defeat. A U.S. Court of Appeal in Washington has confirmed the measures taken against Anthropic. Although the AI company has not acted with evil intent, in the U.S. it is the "president and the defense minister" to decide how the risks are weighed against each other, according to Judge Gregory Katsas.

·Vienna, Austria
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A US appeals court on Friday upheld the Pentagon's decision to remove the country's artificial intelligence (AI) company Anthropic from its supply chain, a move that came after the company refused to lift certain safeguards on its Claude AI model.

·Vilnius, Lithuania
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A US appeals court on Friday upheld the Pentagon's decision to remove the country's artificial intelligence (AI) company Anthropic from its supply chain, a move that came after the company refused to lift certain safeguards on its Claude AI model.

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Reuters broke the news in London, United Kingdom on Friday, September 25, 2026.
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