Appeals Court Lets the Pentagon Designate Anthropic a Supply-Chain Risk

A federal appeals court in Washington, DC has upheld the Department of Defense's designation of an AI company as a supply-chain risk, preventing the military and federal government from using the company's AI models. The court found that the government had adequate justification for the designation based on the company's refusal to allow its AI model to be used for certain applications that the military wanted to pursue. The company had challenged the designation on grounds that it violated its rights, but the divided panel of judges sided with the Trump administration and rejected those claims as standard contract negotiations rather than rights violations. The company is considering further appeals, though the designation means the Pentagon's exclusion can continue indefinitely while legal challenges proceed.