U.S. Court of Appeals for the D.C. Circuit upholds Department of Defense decision to remove Claude from its supply chain

The U.S. Court of Appeals for the D.C. Circuit ruled that the Department of Defense's removal of Anthropic's Claude from its supply chain under the 2018 Federal Acquisition Supply Chain Security Act was a lawful and reasonable action. The court found that Anthropic's refusal to relax usage restrictions on lethal autonomous warfare and large-scale domestic surveillance in the contract, and its ability to influence Claude's behavior through model training, gave the Department of Defense sufficient reason to determine it posed a supply chain risk. The court also rejected Anthropic's due process and First Amendment claims, noting that the Department of Defense provided timely notice and an opportunity to respond, and that the exclusion decision was based on Anthropic's refusal to accept contract terms the Department deemed necessary, not on its policy positions. The ruling was written by Judge KATSAS, with Judge HENDERSON dissenting.