Court Upholds Pentagon Ban on AI Firm Anthropic

A United States appeals court confirmed the Defense Department's move to ban Anthropic from its supply chain on Friday. This ruling validates the Pentagon's order issued in March after the AI startup rejected demands to drop safeguards on its Claude model. Those restrictions specifically blocked use for fully autonomous lethal weapons and mass domestic surveillance of Americans. The conflict started back in February when Anthropic stood firm against these orders from Pentagon Secretary Pete Hegseth.

The blacklisting cancelled all military contracts and stopped other Defense Department contractors from using the technology. This action remains a rare instance where federal authority is applied to blacklist a US company. Anthropic says this exclusion cost it billions of dollars in lost business and hurt its reputation before its highly anticipated initial public offering. The White House has treated the company like an outcast even as it leads a crucial sector of artificial intelligence.

Anthropic CEO Dario Amodei repeatedly warned about AI dangers, yet President Donald Trump dismissed those concerns as a hoax. Now a separate federal court in California last month ruled that a broader ban against Anthropic was illegal. This creates a messy legal conflict since the Pentagon decision upheld on Friday remains in effect based on public procurement regulations. An Anthropic spokesperson told US media they respectfully disagree with the court and are considering all options, including further review.

Reports indicate the military used Claude across classified systems before this crackdown. That usage included the January operation that captured and deposed Venezuelan leader Nicolas Maduro. The risk designation marks a sharp turn in how the government handles AI partnerships while communities face new surveillance risks. Anthropic now faces an uphill battle to clear its name after becoming a pariah at the White House.