DC Circuit Upholds Pentagon Blacklist of Anthropic in 2-1 Ruling
A divided U.S. Court of Appeals for the District of Columbia Circuit on Friday upheld the Pentagon’s blacklisting of Anthropic, ending the company’s best available avenue to reverse a designation that locks Claude out of the entire U.S. defense contracting ecosystem.
The 2-1 panel rejected every argument Anthropic raised — that the Department of Defense’s ban was arbitrary, unauthorized, and unconstitutional. Writing for the majority, Judge Gregory Katsas concluded that the DOD 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 Neomi Rao joined. Both were appointed by President Trump. Judge Karen LeCraft Henderson, appointed by President George H.W. Bush, dissented.
The Pentagon labeled Anthropic a supply-chain risk in March 2026 after negotiations over military use of Claude models collapsed. The designation immediately suspended Claude from DOD systems and extended to every contractor working with the agency — a sweeping exclusion that covers the bulk of the U.S. defense industrial base.
The ruling is a significant escalation of what has become an unusually bitter standoff between Anthropic and the Trump administration. President Trump has repeatedly criticized CEO Dario Amodei on social media. Amodei was conspicuously excluded from the White House state dinner for Chinese President Xi Jinping on September 24 — a gathering that included Sam Altman, Jensen Huang, and Mark Zuckerberg — after Amodei publicly called for an industry-wide development slowdown.
Anthropic issued a statement disputing the outcome: “We respectfully disagree with the court’s decision. Another federal court has already held the government’s parallel designation unlawful. We remain confident in our position and are considering all options, including further review.” The company’s options now narrow to a petition for en banc rehearing by the full DC Circuit or a petition to the Supreme Court — neither a fast nor certain path.
The practical damage is already in place. With the defense contracting channel closed, Anthropic loses access to a procurement pipeline that routes billions of dollars annually to enterprise AI vendors. Competitors whose models carry no supply-chain designation — including OpenAI, Google, and the full xAI / SpaceXAI stack — now face no Defense Department friction.