A federal appeals court in Washington ruled 2–1 on September 25 that the Pentagon can keep calling Anthropic a “supply chain risk”. The label lets the Defense Department remove Claude from its systems and bar contractors from using it in their Pentagon work. Anthropic says it disagrees and is considering further review.
New to this? Read it in simple words
- The US military labeled Anthropic a “supply chain risk” and is removing its AI, Claude.
- Anthropic went to court, and an appeals court has now sided with the military.
- One of the three judges disagreed with the decision.
- Anthropic may ask a bigger court to look at the case again.
- Supply chain risk
- A supplier that the government thinks could harm its systems or its work.
- Appeals court
- A higher court that decides whether a government or lower court acted correctly.
- Dissent
- When a judge disagrees with the other judges and explains why.
What the court decided
The US Court of Appeals for the District of Columbia Circuit ruled 2–1. Judge Gregory Katsas wrote the majority opinion, joined by Judge Neomi Rao. Judge Karen LeCraft Henderson dissented.
Katsas wrote that the department “reasonably feared that Anthropic might manipulate Claude’s design to prevent it from performing national-security functions”. He noted that Anthropic builds restrictions into Claude, and that these have stopped Claude from doing tasks that government users requested.
The judges said they had “no reason to doubt” Anthropic’s intentions. But they found that the label depends “on what Anthropic does, not why Anthropic does it”.
The ruling covers Defense Department work only.
The dissent and the limits
Henderson wrote that this was not what Congress had in mind when it passed the Federal Acquisition Supply Chain Security Act of 2018. The law was meant to guard against sabotage by hostile foreign powers, she argued, not a US company that openly builds safety limits into its products.
The ruling covers only the Defense Department and contractors’ Pentagon work. In August, Judge Rita Lin in California ruled against the government’s attempt to ban Anthropic from all federal contracts.
The dispute began in February, when the Pentagon asked Anthropic to allow “all lawful use” of its models. Anthropic refused to drop its bans on domestic mass surveillance and fully autonomous weapons.
What happens next
Pentagon spokesman Sean Parnell said the ruling “completely validates the Department’s position”. Anthropic said: “We respectfully disagree with the court’s decision.”
The company says it is “considering all options, including further review”. It could ask the full appeals court or the Supreme Court to hear the case, but neither has to accept it.
Charlie Bullock of the Institute for Law & AI told Breaking Defense that he would expect Anthropic to win before the full appeals court, and likely even before the Supreme Court.
Sources
Every fact in this story comes from the sources below. Open them to check our work.
- 1Research · September 25, 2026U.S. federal court says Pentagon can label Anthropic a supply chain risk AP via CP24
- 2Research · September 25, 2026Anthropic loses legal fight to shed DOD’s designation as a ‘supply-chain risk’ Defense One
- 3Research · September 25, 2026DC Circuit panel upholds Pentagon’s ban on Anthropic – so what comes next? Breaking Defense
We compared reporting by the Associated Press, Defense One, and Breaking Defense. The quotes from the opinion and the dissent come from those reports, because we could not open the opinion itself. Anthropic has not said whether it will ask for another review.