US appeals court upholds Pentagon blacklisting of Anthropic

A United States appeals court has upheld the Defense Department's decision to exclude Anthropic from its supply chain. The ruling keeps in place a procurement restriction imposed after the company refused to remove safeguards from its Claude model. The dispute centres on whether those safeguards should remain in place for uses involving fully autonomous weapons and mass domestic surveillance.

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According to the confirmed record, the conflict began in February when Anthropic declined a Pentagon demand to strip out restrictions on Claude. The supply-chain risk designation followed in March and led to the cancellation of military contracts. It also barred other Defense Department contractors from using Anthropic technology, extending the impact beyond the company's direct relationship with the military.

Anthropic has said the blacklisting has cost it billions of dollars in lost business and damaged its reputation ahead of a planned initial public offering. The company said it disagreed with the court's decision and noted that another federal court had already found a separate, broader ban unlawful. The appeals court ruling leaves the Pentagon's procurement-based designation in force for now.

The case matters because it sits at the intersection of artificial intelligence, national security and government procurement. Anthropic is one of the most prominent companies in the AI sector, and the dispute shows how quickly access to defence work can become a legal and commercial issue. It also highlights the tension between companies that build advanced AI systems and government demands for military use cases.

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The row has also drawn in senior political figures. The supplied material says Pentagon Secretary Pete Hegseth made the demand to remove the safeguards, and that the White House has reacted sharply to Anthropic chief executive Dario Amodei's warnings about AI risks. The company has described the designation as highly unusual for a US firm, underlining the exceptional nature of the case.

The broader implications remain unsettled. It is not clear whether Anthropic will seek further review or what effect the ruling will have on its wider business as it moves towards a public listing. It is also unclear how the separate California ruling will interact with the Pentagon's decision, leaving the legal position divided for now.

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