AI firm Anthropic is petitioning a Washington, D.C. federal appeals court to rehear its case against the Pentagon’s blacklisting of its AI models. The Defense Department labeled Anthropic a supply chain risk in March, a decision the company argues was retaliatory and a violation of its First Amendment rights. The D.C. Circuit had previously upheld the Pentagon’s decision, but Anthropic claims the court ignored evidence of retaliation.
Anthropic, a prominent artificial intelligence company, is urging a federal appeals court in Washington, D.C. to reconsider its decision regarding the Pentagon's blacklisting of the firm's AI models. This legal maneuver comes after the D.C. Circuit upheld the Defense Department's earlier decision in September.
The controversy stems from the Defense Department's designation of Anthropic as a "supply chain risk" in March. This classification effectively barred defense contractors from utilizing Anthropic's technology in their work with the agency. According to Anthropic's attorneys, the designation was a consequence of the company's refusal to allow its models to be used for mass surveillance of Americans or for lethal autonomous warfare, and its public commitment to AI safety principles.
Dario Amodei, co-founder and chief executive officer of Anthropic, during an interview. (Photo: Jason Henry | Bloomberg | Getty Images)
The dispute escalated after negotiations between Anthropic and the Pentagon regarding the military's use of its Claude AI models broke down. Anthropic subsequently filed a lawsuit against the Trump administration, seeking to overturn the blacklisting. The company argues that the Pentagon's decision was retaliatory and ignored clear evidence of this, citing Anthropic's public statements on AI safety as the primary reason for the designation.
Adding to the legal complexities, a federal judge in San Francisco ruled in August that the Department of Defense had indeed violated Anthropic's First Amendment rights, deeming the supply chain risk designation an illegal act of retaliation. This ruling contrasts with the D.C. Circuit's 2-1 decision, which rejected Anthropic's claims that the ban was arbitrary, unauthorized, and unconstitutional.
Before this public legal battle, Anthropic had been an early partner for various U.S. agencies, including the DOD. The company had even signed a $200 million contract with the Pentagon in July 2025. However, discussions surrounding the deployment of Claude on the DOD's GenAI.mil platform faltered in September of that year, leading to the current impasse.
Anthropic has declined to comment further on the matter beyond their court filings. A Pentagon spokesperson stated that the agency does not comment on ongoing litigation.
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