Full Breakdown
Pentagon Upholds Anthropic Blacklist in D.C. Circuit Decision
By Drooid · · How we work
Core Ruling: Appeals Court Affirms Supply-Chain Risk Designation
On September 25, the U.S. Court of Appeals for the District of Columbia Circuit rejected Anthropic’s challenge to the Department of Defense’s designation of the AI startup as a “supply-chain risk.” The three-judge panel voted 2-1, with Judges Gregory Katsas and Neomi Rao writing the majority opinion and Judge Karen LeCraft Henderson dissenting. The ruling allows the Pentagon to continue barring Anthropic’s Claude models from Department systems and from use by defense contractors.
Background: Dispute Over Claude Safeguards
The conflict began in February 2026 when the Pentagon demanded that Anthropic remove safety guardrails that prevented Claude from being used in fully autonomous weapons and mass domestic surveillance. Anthropic refused, citing ethical concerns. On March 3, Secretary of War Pete Hegseth formally designated Anthropic a supply-chain risk under the Federal Acquisition Supply Chain Security Act (FASCSA). Anthropic filed lawsuits on March 9 in the D.C. Circuit and the Northern District of California.
Key Figures
- Gregory Katsas – Circuit Judge, author of the majority opinion.
- Neomi Rao – Circuit Judge, joined the majority.
- Karen LeCraft Henderson – Circuit Judge, dissenting.
- Pete Hegseth – Secretary of War, issued the designation.
- Emil Michael – Pentagon chief technology officer, defended the blacklist.
- Danielle Cohen – Anthropic spokesperson, responded to the ruling.
Data & Stakes
The designation also prevents any Department contractor from integrating Claude into defense projects.
Official Statements & Responses
Pentagon communications spokesperson Sean Parnell said the decision “completely validates the Department’s position.”
Conflicting Judicial Outcomes
U.S. District Judge Rita Lin in San Francisco last month struck down a parallel Pentagon designation under a different procurement law, finding the action unlawful retaliation for Anthropic’s expressed views on AI safety. The D.C. Circuit decision does not overturn that California ruling; it upholds the designation under FASCSA, which has a broader definition of “supply-chain risk.” Analysts note the split outcomes could eventually be resolved by the full D.C. Circuit or the Supreme Court.
Verbatim Quotes
- “The Department had ample support for its conclusion that the continued integration of Claude into the Department’s information systems, by the Department or its contractors, presented a statutorily covered national-security risk,” — Judge Gregory Katsas
- “The hammer of justice has smashed [Anthropic’s] arguments. They are a Supply Chain Risk to the defense industrial base serving the [Department of War]” — Emil Michael, Pentagon CTO
What’s Next
The majority opinion notes that the only further appellate routes are a rehearing by an en banc panel of the D.C. Circuit or a petition to the Supreme Court, both discretionary. Anthropic’s legal team may pursue one of those options. The Pentagon has signaled no intention to alter the blacklist pending any successful appeal.