Anthropic lost its D.C. Circuit challenge to the Pentagon’s supply chain risk designation, which bars the military and its contractors from using Claude on defense work, in a 2-1 ruling that the department acted within its authority. Judge Gregory Katsas, joined by Judge Neomi Rao, cited Claude refusing legitimate government queries and the risk that Anthropic could restrict the model through future updates, and rejected Anthropic’s First Amendment claim. Judge Karen LeCraft Henderson dissented, arguing the law targets deliberate sabotage, not a contractor openly enforcing its own use restrictions. A federal judge in San Francisco ruled the Pentagon’s parallel designation illegal last month, and Anthropic said it’s weighing further review.
