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A federal appeals court in Washington, D.C., has refused to halt the Pentagon's national security blacklisting of AI company Anthropic, delivering a temporary win for the Trump administration. The ruling comes as another appeals court reached the opposite conclusion in a separate but related legal challenge filed by the same company.
Anthropic, the company behind the widely used Claude AI assistant, argues that Defense Secretary Pete Hegseth exceeded his authority when he labeled the firm a national security supply-chain risk. The designation followed Anthropic's refusal to remove safety guardrails from its AI products, effectively barring it from Pentagon contracts and potentially triggering a broader government-wide blacklist.
Company executives warn the move could cost Anthropic billions in lost revenue and lasting reputational damage. Despite the D.C. Circuit Court's denial of a pause on the designation, an Anthropic spokesperson confirmed the company remains confident the courts will ultimately rule the designation unlawful.
Acting Attorney General Todd Blanche praised the ruling, framing it as a victory for military readiness and presidential authority over defense operations.
The dispute stems from Anthropic's refusal to allow Claude to be used for military surveillance or autonomous weapons systems, citing safety and ethical concerns. Hegseth invoked two separate laws to issue the designations, and Anthropic is challenging both. A California federal judge previously blocked one of the orders on March 26, ruling that the Pentagon appeared to have unlawfully retaliated against Anthropic for its AI safety stance.
In its legal filings, Anthropic claims the government violated its First Amendment free speech rights by penalizing the company for its views on AI safety, and its Fifth Amendment due process rights by denying it a chance to contest the designation. The Justice Department counters that its decision was driven by contractual disagreements, not ideology.
The two cases are being heard under different laws, with the D.C. case carrying broader implications for civilian government contracts.
