Appeals Court Upholds Pentagon's Blacklisting of Anthropic

A federal appeals court upheld on Friday the Pentagon’s blacklisting of Anthropic from military contracts. This decision represents a victory for President Donald Trump and Defense Secretary Pete Hegseth in their dispute with the AI startup regarding safety protocols for its technology. The 2-1 ruling by the US Court of Appeals in Washington, D.C. was made in response to a lawsuit filed by Anthropic, which challenged its March designation by the Pentagon as a national security supply chain risk. Anthropic claims this designation has resulted in billions of dollars in lost business and has harmed its reputation ahead of a planned initial public offering. The court's majority found it reasonable for the Pentagon to designate Anthropic after the company refused to permit its products to be utilized for autonomous weapons or mass surveillance. The court rejected Anthropic’s assertion that the Pentagon retaliated against it for its stance on AI safety and ethics. The majority opinion, authored by Judge Gregory Katsas, supported Hegseth’s argument that Anthropic’s safety restrictions could jeopardize military operations, stating, “The Secretary raises the deeply sobering prospect of overly constrained AI models shutting down unexpectedly and thus causing important military operations to fail.” Anthropic expressed its disagreement with the ruling but stated it remains confident in its position and is considering options for further review by the full appeals court. The White House and the Department of Defense did not immediately respond to requests for comment. Last month, a federal judge in San Francisco invalidated a similar designation under a different law, ruling that the administration had unlawfully retaliated against Anthropic for its views on AI safety. US District Judge Rita Lin also blocked Trump’s government-wide ban on Anthropic and Hegseth’s order prohibiting military contractors from engaging in business with the startup. Hegseth designated Anthropic as a risk under two separate laws after the company declined to eliminate safety measures against its technology being used for autonomous weapons or mass domestic surveillance. This unprecedented action followed months of unsuccessful negotiations and public disputes between Hegseth and Trump, who accused Anthropic of endangering American lives through ideological posturing. Anthropic refuted this characterization, asserting that AI is not yet sufficiently reliable for safe use in autonomous weapons and that it opposes domestic surveillance as a violation of fundamental rights.