U.S. Appeals Court Upholds Pentagon’s National Security Risk Designation for Anthropic

Anthropic’s Claude faces Pentagon restrictions after a U.S. appeals court upholds its designation as a national

A federal appeals court has upheld the Pentagon’s designation of Anthropic and its Claude artificial intelligence models as a national-security supply-chain risk, dealing a setback to the AI company after a lower court had ruled in its favor.

The U.S. Court of Appeals for the District of Columbia Circuit ruled 2–1 against Anthropic on September 25, allowing the Pentagon to exclude Claude from its supply chain under the Federal Acquisition Supply Chain Security Act of 2018. The court said there was sufficient support for the government’s conclusion that continued integration of Claude into military information systems presented a covered national-security risk.

Court Cites Claude’s Built-In Restrictions

The dispute centers on restrictions Anthropic has built into Claude governing certain uses of the model. According to Coin Bureau the court’s ruling, those restrictions have prevented Claude from performing tasks requested by government users.

The court specifically noted that Claude had refused some tasks that were considered appropriate in a national-security context, including summarizing threat assessments, processing classified documents and translating intercepted materials describing violence.

Anthropic had resisted government demands for broader authorization of Claude’s use, including restrictions related to lethal autonomous warfare and domestic surveillance. The company argued that its safeguards were designed to prevent misuse of its technology. The appeals court, however, rejected Anthropic’s legal challenges to the Pentagon’s exclusion.

The decision reverses the outcome of a lower-court case in Washington while leaving a separate legal dispute in California with a different result. The overlapping cases involve different legal authorities governing the government’s actions toward Anthropic.

Anthropic Considers Further Legal Action

Anthropic said it disagrees with the appeals court’s decision and is considering its options, including further review. The company has previously defended its restrictions as safeguards against potentially harmful applications of advanced AI systems.

The ruling does not establish that Claude itself is prohibited from all government or military use. Rather, it upholds the Pentagon’s authority to exclude Anthropic’s technology from its supply chain under the specific statute considered by the court.

The case also illustrates the tension between AI companies’ usage safeguards and government demands for unrestricted access in national-security applications. The appeals court’s majority concluded that the Pentagon had adequate statutory grounds for treating Anthropic as a supply-chain risk, while one judge dissented from that conclusion.

IPO Plans Face Additional Uncertainty

The court decision comes as Anthropic prepares for a potential public offering that has been described as potentially the largest IPO. Financial Times reported that the company is considering an IPO with a potential valuation of up to $2 trillion, although the offering remains subject to future decisions by Anthropic and market conditions.

The legal setback adds a new issue for the company to address as it considers its next steps. Anthropic could seek further judicial review following the D.C. Circuit’s 2–1 ruling.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.