Court Rejects Anthropic's Emergency Request Over Pentagon Supply Chain Label
A federal appeals court sided with the Department of Defense on Wednesday, refusing to pause a supply chain risk designation that Anthropic had asked the judges to block immediately. The D.C. Circuit panel said the government's interest in controlling AI technology access during military operations outweighed the financial harm to the company.
Anthropic's lawyers argued the designation had already cost the company money and threatened its reputation. They asked for an emergency injunction to freeze the label while courts examined whether it was legal.
The three-judge panel disagreed. "On one side is a relatively contained risk of financial harm to a single private company," the judges wrote. "On the other side is judicial management of how, and through whom, the Department of Defense secures vital AI technology during an active military conflict."
The court acknowledged Anthropic would "likely suffer some irreparable harm" and ordered an expedited decision on the underlying case.
What Led to the Designation
The clash began in February when Anthropic CEO Dario Amodei told Defense Secretary Pete Hegseth the company would not allow the Pentagon to use Claude for autonomous weapons or mass surveillance of Americans. Defense officials responded by labeling Anthropic a supply chain risk-a designation that restricts government procurement from the company.
Anthropic called the move unlawful retaliation. The company said it was exercising legitimate control over its own products, not undermining national security.
The Court's Reasoning
Two judges on the panel, Gregory Katsas and Neomi Rao, are Trump appointees who have previously sided with the government on national security matters. Both have shown expansive views of executive power in past rulings.
The court's decision does not settle whether the designation itself is legal. Instead, it simply allows the Pentagon to maintain the label while the case proceeds through the courts.
An Anthropic spokesperson said the company remains "confident the courts will ultimately agree that these supply chain designations were unlawful."
For government workers involved in AI for Government procurement or policy, the ruling signals that courts will move cautiously before blocking executive actions on AI security, even when companies challenge them.
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