D.C. Circuit Keeps Pentagon Procurement Ban on Anthropic in Place
The appeals court ruling leaves the exclusion in place as Anthropic considers further action, including a possible Supreme Court petition.
A federal appeals court in Washington has refused to lift a Department of Defense order barring Anthropic from military procurement, leaving the company designated as a national security supply chain risk while it pursues further legal options.
The U.S. Court of Appeals for the District of Columbia Circuit denied Anthropic’s emergency petition to halt the designation. The ruling keeps the Pentagon’s contracting exclusion in effect, despite a separate legal victory for the company in federal court last month.
Anthropic said it respectfully disagrees with the D.C. Circuit’s determination and maintains that the government’s risk assessment lacks merit. The company said it is evaluating its legal strategy, including a possible request for a rehearing before the full D.C. Circuit bench or an emergency petition to the U.S. Supreme Court.
In filings challenging the Pentagon’s administrative determination, the San Francisco-based maker of the Claude model family said the exclusion had severed existing government integration pipelines and shut it out of public-sector procurement pools. Anthropic said the designation had caused billions of dollars in commercial and institutional losses and warned it could threaten the company’s market valuation and institutional reputation as it prepares for an initial public offering.
The federal courts have reached different outcomes on separate risk designations. Just weeks before the appeals court ruling, a judge in San Francisco invalidated a parallel designation issued under a different statutory framework. The U.S. District Court for the Northern District of California ruled that federal authorities had unlawfully retaliated against Anthropic for its public policy positions and advocacy surrounding artificial intelligence safety standards.
The Pentagon’s supply-chain risk authorities are codified under Title 10 of the U.S. Code and governed by defense acquisition security frameworks. They allow military officials to restrict vendors and software components deemed vulnerabilities to defense systems or communications networks. Such designations generally bar prime defense contractors and federal program managers from embedding restricted code, infrastructure or models in defense applications.
Founded in 2021 by former OpenAI executives Dario Amodei and Daniela Amodei, Anthropic is a public-benefit corporation focused on developing frontier AI models alongside strict safety protocols. It has secured multi-billion-dollar financing commitments from tech giants including Amazon and Google, and has sought to deploy its models in healthcare, finance and software engineering while competing with OpenAI and Microsoft for enterprise software and public-sector cloud modernization contracts.
