US Appeals Court Upholds Pentagon's Supply-Chain-Risk Label for Anthropic

A federal appeals court in Washington, D.C., has upheld the Department of Defense's controversial designation of Anthropic as a national-security supply-chain risk, rejecting the AI company's bid to overturn the label that bars the military from using its Claude models. In a 2-1 decision on Friday, Circuit Judges Gregory Katsas and Neomi Rao found that the Pentagon had sufficient legal grounds under the Federal Acquisition Supply Chain Security Act to impose the designation, determining that Anthropic's technical ability to embed restrictions into Claude—and instances where the model declined government user requests—constituted a covered security risk.