D.C. court sides with military in Anthropic AI dispute

The D.C. Circuit Court of Appeals on Wednesday rejected a request from Anthropic to temporarily block its blacklisting by the Department of Defense. The ruling from a three-judge panel left in place part of DOD’s designation of the artificial intelligence company as a supply chain risk. The appeals court said that the government’s interest in the management of AI technology during an active military conflict outweighed the financial harm Anthropic faced from the label. The ruling was issued while an underlying lawsuit challenging that sanction plays out.

The DOD’s designation of Anthropic as a supply chain risk has barred defense agencies or contractors from using Anthropic’s AI models on government projects. Anthropic had a $200 million contract with the DOD, but hit the brakes in February when the government demanded full access to its technology, including the AI product Claude. Todd Blanche, the acting U.S. attorney general, said the Wednesday decision was a resounding victory for military readiness.

The appeals court additionally found that DOD’s actions have not “chilled” Anthropic’s practice of free speech. Because Anthropic faces financial loss, the appeals court agreed with it that an expedited ruling in the lawsuit was warranted. Anthropic was grateful the court recognized these issues need to be resolved quickly, a spokesperson said in a statement. The company was confident that the court would ultimately find the supply chain risk label unlawful.

Didn’t Anthropic win in a California court? Last month, a San Francisco federal court temporarily blocked the Pentagon’s supply chain risk designation. The DOD used two distinct designations in the U.S. federal courts to justify the supply chain risk action, leading Anthropic to challenge the designation in two separate courts. In California, U.S. District Judge Rita Lin said the DOD’s actions seemed to punish Anthropic, rather than protect national security. The Trump administration appealed the California ruling last week. It was unclear on Thursday morning how the two conflicting orders would affect Anthropic.

Why did the DOD label Anthropic a supply chain risk? The DOD asked for unrestricted use of the company’s artificial technology. However, the company’s CEO, Dario Amodei, said he couldn’t agree to that use. He alleged that the DOD wanted to use Anthropic’s AI models to develop autonomous weapons and build surveillance systems to monitor Americans. The dispute led Defense Department Secretary Pete Hegseth to issue the label against the company in late February. 

Dig deeper: Listen to Harrison Watters’ report on Anthropic’s Northern California lawsuit against the Pentagon.