An appeals court rejects Anthropic’s request to block the Pentagon’s listing

An appeals court in Washington DC today denied Anthropic PBC’s request for a stay in a lawsuit against the Department of Defense.

The three-judge panel said the intelligence agency failed to meet the strict requirements for an emergency withdrawal in the case.

Anthropic sued the DOD in two separate lawsuits after the Pentagon designated the company as a supply chain risk. In a separate but related case last month, a San Francisco judge granted Anthropic a preliminary injunction to temporarily block supply chain risk designations. “There is nothing in the ruling that supports the Orwellian idea that an American company can be called a potential enemy and subversive of the US by expressing disagreement with the government,” said Judge Rita F. Lin.

In today’s decision, the council wrote that, “In our opinion, the balance here is reduced to the government.” It added, “On the one hand there is a relatively contained risk of financial harm to a single private company. On the other hand is the legal management of how, and by whom, the Department of Defense protects critical AI technology during military conflict.”

The disagreement began earlier this year during unsuccessful negotiations over a $200 million contract. The dispute centered on Anthropic’s refusal to allow the DOD to use its Claude program “for all legitimate purposes.” The company warned that such vague language could open the door to adversarial uses, including surveillance of US citizens or autonomous weapons systems.

As the courts are divided, Anthropic is temporarily excluded from Pentagon deals but not from the wider government. Contractors are prohibited from using Claude for Department of Defense work, although it is still allowed for non-DOD projects.

The panel agreed that Anthropic is “likely to be harmed to some degree without settlement,” but added that the company’s interests appear to be “financial in nature.” Regarding Anthropic’s contention that the ban infringes on his right to free speech to criticize the government, the panel wrote, “Anthropic has not indicated that its speech will be moderated during the pendency of this case.”

While this is a setback for Anthropic, a spokesperson said the company is “hopeful that the courts will ultimately agree that this supply chain designation was unlawful.”

Todd Blanche, acting US attorney general, writing in X, called today’s decision “a stunning victory for military preparedness. He added, “Our position has been clear from the beginning – our military needs full access to Anthropic models if their technology is to be integrated into our critical systems.”

Image: Anthropic