US appeals court upholds Pentagon’s designation of Anthropic as a risk — Defense News

A federal appeals court in Washington, US, by a two-to-one majority upheld the Pentagon’s decision to place Anthropic on a list of risks to the national security supply chain. The ruling leaves in force the exclusion of the artificial intelligence developer from military contracts.

As Defense News reports, Anthropic challenged the Pentagon’s decision made in March. The company said it had lost billions of dollars in potential business and suffered reputational damage ahead of its expected initial public offering.

The appeals court’s position

The majority of judges found the Pentagon’s position justified after Anthropic refused to permit the use of its products for autonomous weapons or mass surveillance. The court also rejected the company’s claim that the Pentagon had taken retaliatory action because of its views on artificial intelligence safety and ethics.

Judge Gregory Katsas’s opinion stated that US Defense Secretary Pete Hegseth raised concerns about the risk of an abrupt shutdown of overly restricted AI models. In the secretary’s view, this could lead to the failure of important military operations.

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The company’s response and a parallel case

San Francisco-based Anthropic said it respectfully disagreed with the decision and was considering further legal steps, including an appeal to the full appeals court. The White House and the US Department of Defense did not provide immediate comment.

At the same time, last month US District Judge Rita Lin in San Francisco overturned a parallel decision made under a different law. She concluded that the administration had unlawfully taken retaliatory action in response to Anthropic’s position on AI safety, and also blocked President Donald Trump’s government-wide ban on the company and Hegseth’s order prohibiting military contractors from conducting any business with it.

According to the source, Hegseth designated Anthropic a risk under two different laws after the company refused to lift restrictions on the use of its technologies in autonomous weapons and for mass domestic surveillance. Anthropic insists that modern AI is not yet reliable enough for safe use in autonomous weapons and calls domestic mass surveillance a violation of fundamental rights.