DC Circuit Court upholds Pentagon's determination listing Anthropic as a supply chain risk

The U.S. Court of Appeals for the District of Columbia Circuit, in a 2-1 decision, upheld the Department of Defense's determination that Anthropic poses a national security and supply chain risk, effectively banning its models from military systems and defense contracts. The dispute stems from the Pentagon's demand for unrestricted access to Claude for "all lawful uses," while Anthropic refused to abandon safety guardrails prohibiting use in fully autonomous lethal weapons and large-scale domestic surveillance. After contract renegotiation failed and Claude's safety filters rejected some government user prompts, Secretary of Defense Pete Hegseth formally made the determination and criticized the company's "Silicon Valley ideology" on X. Subsequently, Trump on Truth Social demanded that "every federal agency" immediately stop using Anthropic technology, and the Treasury Department, General Services Administration, and NASA and HHS participating in the GSA OneGov agreement subsequently scaled back usage. Judge Gregory Katsas found the Pentagon had "ample basis" and dismissed unconstitutional retaliation claims, creating a legal split with a California federal court that previously found the Pentagon's actions unlawful.