A federal appeals court has denied a request by artificial intelligence company Anthropic to temporarily block its blacklisting by the Department of War, siding with the Trump administration in a closely watched dispute over national security and corporate rights.
The Wednesday, April 8, ruling means Anthropic remains excluded from Pentagon contracts while litigation continues, though the company can still work with other government agencies.
Defense contractors are prohibited from using Anthropic’s Claude model in military projects, but may deploy it elsewhere.
In its order, the appeals court acknowledged that Anthropic “will likely suffer some degree of irreparable harm absent a stay,” but concluded that the government’s interests outweighed the company’s.
“On one side is a relatively contained risk of financial harm to a single private company. On the other side is judicial management of how, and through whom, the Department of War secures vital AI technology during an active military conflict,” the court wrote.
The judges emphasized that while Anthropic’s losses may be significant, they are primarily financial. The court also rejected claims that the Pentagon’s designation chilled free speech, noting that “Anthropic does not show that its speech has been chilled during the pendency of this litigation.”
Because of the harm Anthropic is likely to suffer, the court ordered a “substantial expedition” in reviewing the case.
Anthropic responds
Anthropic expressed disappointment but struck a hopeful tone. “We are grateful the court recognized these issues need to be resolved quickly,” a spokesperson said.
“We are confident the courts will ultimately agree that these supply chain designations were unlawful.”
The company added that while the case was necessary to protect its customers and partners, its focus remains on “working productively with the government to ensure all Americans benefit from safe, reliable AI.”
Acting U.S. Attorney General Todd Blanche, on his part, hailed the ruling as a “resounding victory for military readiness.”
“Today’s D.C. Circuit stay allowing the government to designate Anthropic as a supply chain risk is a resounding victory for military readiness. Our position has been clear from the start — our military needs full access to Anthropic’s models if its technology is integrated into our sensitive systems. Military authority and operational control belong to the Commander-in-Chief and Department of War, not a tech company,” he wrote in a post on X.
Secretary of War Pete Hegseth had declared Anthropic a supply chain risk in February, making it the first American company to receive a designation historically reserved for foreign adversaries.
Dispute
The Pentagon argued that Anthropic’s technology posed a threat to national security, requiring contractors to certify they would not use Claude in military work.
The appeals court’s decision contrasts with a ruling last month from U.S. District Judge Rita Lin in San Francisco, who granted Anthropic a preliminary injunction against a sweeping Trump administration directive. That order required all federal agencies to cease using Anthropic’s technology.
Judge Lin found the directive likely violated the First Amendment, writing that “these broad punitive measures were likely unlawful and that [Anthropic] is suffering irreparable harm from them.”
She emphasized that while agencies are not required to use Anthropic’s products, a blanket prohibition raised constitutional concerns.
Her ruling temporarily blocked enforcement of Trump’s order, allowing Anthropic to continue working with non-defense agencies.
Anthropic signed a $200 million contract with the Pentagon in July 2025 to deploy its Claude model across classified networks.
The company was praised for integrating seamlessly with contractors like Palantir. But negotiations over Claude’s deployment on the Pentagon’s GenAI.mil platform stalled in September.
The Pentagon sought unfettered access to Anthropic’s models for all lawful purposes, while Anthropic insisted its technology not be used for autonomous weapons or domestic mass surveillance. The failure to reach an agreement pushed the dispute into the courts.
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