Federal appeals court upholds Pentagon designation of Anthropic as supply chain risk
Anthropic is challenging its designation as a supply chain risk.
A federal appeals court on Friday upheld the Pentagon's designation of Anthropic as a supply chain risk.
The ruling, from the U.S. Court of Appeals for the District of Columbia Circuit, came in a lawsuit by Anthropic challenging its designation.
Anthropic argued the federal government retaliated against the company over its opposition to the use of its AI for lethal autonomous warfare or mass surveillance of Americans.
The company contended the government violated its First Amendment rights, misused a national security law to blacklist it, and sidestepped the normal process for canceling federal contracts.
In a 2 -- 1 decision, the D.C. Circuit rejected Anthropic's challenges to the exclusion.
The majority said the department had enough evidence to conclude that Claude's built-in restrictions and the unresolved contract dispute could make it unreliable for military operations.
It also rejected Anthropic's claims that the decision violated its rights to free speech and due process.
Judge Karen LeCraft Henderson dissented and disagreed with the majority's reading of the law that gives the department authority to take that action.
In her dissent, she wrote that the law does not treat "a contractor's honest and upfront enforcement of restrictions" as the kind of supply-chain risk that permits the government to blacklist it.
In a separate but related lawsuit a federal judge ruled against the government and that is still in effect.
In that suit, U.S. District Judge Rita Lin said in an August decision the government's actions "were based on a desire to make a public example out of Anthropic for its 'arrogance' in criticizing the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model."
Anthropic said in a statement Friday that it disagreed with the appellate 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," an Anthropic spokesperson said in a statement Friday.
Defense Secretary Pete Hegseth praised the appellate court's decision in a statement on X Friday.
"Confirmed: @AnthropicAI = Supply Chain Risk," he said in the post. "The @DeptofWar does what is right for the Country and our Warriors."
Defense Department Spokesman Sean Parnell also praised the decision in an X post.
"The Department of War will NEVER compromise on national security. Today's DC Circuit Court ruling completely validates the Department's position," he said.
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