A federal appeals court in Washington, D.C., has thrown its support behind the Trump administration’s efforts to blacklist Anthropic as a “supply chain risk,” a label which would prevent the company from partnering with the U.S. military or federal contractors.
The 2-1 decision arrived Friday, defending the Department of War’s actions and describing any partnership between Anthropic and the federal government as “a statutorily covered national security risk,” according to a majority decision written by Gregory Katsas, a judge on the U.S. Court of Appeals for the D.C. Circuit appointed by Trump during his first term.
The government had originally based its designation of Anthropic as a supply chain risk on two different legal designations. The first was found by a federal district judge in San Francisco last month to be illegal; the second is the one the panel of judges upheld on Friday. The company could now request a rehearing from the same panel of judges or take its case to the Supreme Court. “We respectfully disagree with the court’s decision,” an Anthropic spokesperson told Gizmodo. “Another federal court has already held the government’s parallel designation unlawful. We remain confident in our position and are considering all options, including further review.”
The DoW and Anthropic first teamed up in July of last year in a $200 million deal, through which Anthropic agreed to “prototype frontier AI capabilities that advance U.S. national security.” The Wall Street Journal reported in February that Claude was used by the U.S. military during its operation to capture Venezuelan president Nicolás Maduro and his wife, Cilia Flores, from a presidential palace in Caracas. Later that month, Anthropic CEO Dario Amodei said that Anthropic would not agree to allow the federal government to use its technology for domestic surveillance or fully autonomous weapons systems, two applications of AI which, according to Amodei, “can undermine, rather than defend, democratic values.”
U.S. Secretary of War Pete Hegseth shot back that Anthropic’s refusal to consent to what his department defined as “any lawful use” of AI amounted to the company trying to call the shots on U.S. military strategy. In an X post on February 27, he described Amodei’s stance as “a master class in arrogance and betrayal as well as a textbook case of how not to do business with the United States Government or the Pentagon.”
This week, Anthropic delivered a master class in arrogance and betrayal as well as a textbook case of how not to do business with the United States Government or the Pentagon.
Our position has never wavered and will never waver: the Department of War must have full, unrestricted…
— Secretary of War Pete Hegseth (@SecWar) February 27, 2026
The same day, Trump wrote in a Truth Social post that “The Leftwing nut jobs at Anthropic have made a DISASTROUS MISTAKE trying to STRONG-ARM the Department of War, and force them to obey their Terms of Service instead of our Constitution… Therefore, I am directing EVERY Federal Agency in the United States Government to IMMEDIATELY CEASE all use of Anthropic’s technology. We don’t need it, we don’t want it, and will not do business with them again!”
Anthropic filed two lawsuits against the Department of War the following month, claiming the supply chain risk label was an “unprecedented and unlawful” violation of its First Amendment-protected right to free speech. Katsas wrote in the D.C. appeals court’s decision that the federal government’s blacklisting of Anthropic had been lawfully “based on the company’s refusal to assent to a contract term that the Department deemed essential”; the court also rejected Anthropic’s argument that its First Amendment-protected right to free speech had been violated.
The relationship between Anthropic and the Trump administration has grown steadily more bitter since the company filed its lawsuits in March. It was forced to cut off access to its then-most powerful models in June following an order from the federal government, which cited an obscure export law and some experts have said was legally dubious. More recently, Amodei’s calls for a slowdown among frontier AI labs have been mocked by Trump as a “hoax.” According to CNBC, no one from Anthropic attended a White House dinner Thursday night held in honor of Chinese President Xi Jinping’s visit to Washington, with a stacked guest list that included Meta CEO Mark Zuckerberg, OpenAI CEO Sam Altman, Google CEO Sundar Pichai, Nvidia CEO Jensen Huang, and SpaceXAI CEO Elon Musk.
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