Appeals Court Rejects Anthropic’s Bid to Halt Pentagon Blacklist
On Wednesday, the appeals court ruled against Anthropic’s motion for a stay, finding that the equitable balance here cuts in favor of the government.
The court acknowledged that while Anthropic faces financial harm, the government’s interest in controlling AI technology procurement during military operations outweighs the company’s interests. On one side is a relatively contained risk of financial harm to a single private company. On the other side is judicial management of how, and through whom, the Department of War secures vital AI technology during an active military conflict,
the court wrote.
How the Pentagon Blacklist Unfolded
In early March, the DOD officially designated Anthropic a supply chain risk, marking the first time an American AI company received this designation historically reserved for foreign adversaries. Defense Secretary Pete Hegseth announced the move via social media in late February, shortly after President Trump ordered federal agencies to cease all use of Anthropic’s Claude technology.
The blacklist requires defense contractors to certify they don’t use Claude AI models in military work. Anthropic had signed a $200 million Pentagon contract in July but negotiations stalled in September when the DOD demanded unfettered access to its models while Anthropic sought safeguards against autonomous weapons deployment.
A Divided Legal Outcome Leaves Anthropic in Limbo
The situation remains contradictory across courts. Late last month, a San Francisco federal judge granted Anthropic a preliminary injunction that bars enforcement of the Trump administration’s ban on Claude use. Yet this week’s appeals court decision permits the DOD blacklist to stand pending full litigation.
The court acknowledged Anthropic will likely suffer some degree of irreparable harm absent a stay,
but characterized the damage as primarily financial rather than existential. On the free speech claim, the court found that Anthropic does not show that its speech has been chilled during the pendency of this litigation.
However, the court ordered substantial expedition
of the case to resolve the matter quickly.
What Comes Next for Anthropic
Anthropic responded by expressing gratitude that courts recognized the urgency while maintaining confidence that the courts will ultimately agree that these supply chain designations were unlawful.
The company emphasized its desire to work productively with government agencies despite the setback.
The dual legal track reflects the complexity of the Pentagon’s actions. The DOD relied on two separate statutory designations, each requiring challenge in different courts, creating the current split verdicts. Anthropic remains able to serve non-military federal agencies, preserving some revenue streams while the core Pentagon dispute plays out through the courts over coming months.
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