Key facts
- A US appeals court upheld the Pentagon's decision to blacklist AI company Anthropic.
- The Pentagon designated Anthropic a national security risk due to supply chain concerns.
- The ruling allows the Pentagon to deny Anthropic contracts.
- Anthropic had sued to block the designation, citing free speech and due process violations.
- A lower court had previously blocked the blacklisting, but the appeals court has now allowed it to stand during the legal challenge.
A US appeals court on Friday upheld the Pentagon's decision to blacklist AI company Anthropic, designating it a national security risk and continuing a dispute over military access to its technology. The ruling allows the Pentagon to deny the AI startup contracts.
The conflict began in January when the Defense Department sought to have Anthropic remove safety guardrails from its AI models, which could have allowed the government to use the technology for autonomous weapons targeting and domestic surveillance. Anthropic refused, leading to a confrontation that resulted in the blacklisting and lawsuits.
Despite the ban, government agencies reportedly continued to use Anthropic's tools as the White House and the company worked to mend ties ahead of Anthropic's planned IPO. The Pentagon formally designated Anthropic a supply-chain risk on March 5, and the General Services Administration terminated Anthropic's OneGov deal, which made Claude available to the federal government.
Anthropic sued to block the designation, arguing it was unlawful and violated its free speech and due process rights. A lower court had temporarily blocked the blacklisting in March, but the appeals court has now allowed the designation to remain during the ongoing legal challenge. The company executives had stated the blacklisting could cut its 2026 revenue by billions of dollars and cause reputational harm.