U.S. Court of Appeals for the D.C. Circuit upholds Pentagon's decision to list Anthropic as a supply chain risk

The U.S. Court of Appeals for the D.C. Circuit ruled 2 to 1 that the Pentagon's decision to designate Anthropic as a supply chain risk stands, and Anthropic's due process and First Amendment claims were rejected. The majority opinion noted that the usage restrictions built into Claude had repeatedly prevented it from performing tasks requested by government users, and there had been a dispute over whether it could be used in an overseas military operation, so the Secretary of Defense had sufficient basis to determine that connecting it to information systems constituted a national security risk. The determination was made under Section 4713 of the Supply Chain Security Act, announced by Secretary of Defense Hegseth on March 3, and prohibits Anthropic from working with any contractor, supplier, or partner that does business with the U.S. military. Anthropic said the dispute centered on its refusal to remove two restrictions, concerning lethal autonomous warfare and mass surveillance of Americans. Dissenting Judge Henderson argued that a narrower definition of supply chain risk should apply, and expressed concern that the ruling could allow the Secretary to require other contractors to accept similar conditions.