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Anthropic asks court to rehear appeal over Pentagon blacklisting of its AI models

Company argues the 'supply chain risk' label was retaliation for its AI safety stance

By LineZotpaper
Published
Read Time2 min
Anthropic has asked a federal appeals court in Washington, D.C. to rehear its challenge to the Pentagon's blacklisting of its AI models, arguing in a filing on Tuesday that the 'supply chain risk' designation was retaliation for the company's stance on AI safety.

Anthropic is asking a federal court in Washington, D.C. to rehear its appeal in a case concerning the Pentagon's blacklisting of the company's AI models.

In a petition filed on Tuesday, attorneys for the AI company argued that a divided panel wrongly upheld the Defense Department's national security 'supply chain risk' designation, which blocks defense contractors from using Anthropic's technology in their work with the agency.

'The Secretary of War branded Anthropic, an American AI company whose models help defend the nation, a national-security supply chain risk because it declined to permit its models to be used for mass surveillance of Americans or lethal autonomous warfare and publicly explained those AI-safety commitments,' the filing said. 'A divided panel upheld that extraordinary designation.'

The Defense Department, led by Pete Hegseth, applied the label in March after negotiations about how the military could use Anthropic's Claude AI models broke down. Anthropic had signed a $200 million contract with the Pentagon in July 2025, but talks collapsed the following September as the company began negotiating Claude's deployment on the department's GenAI.mil platform.

Anthropic sued the Trump administration in an effort to undo the action. In September, the D.C. Circuit upheld the blacklisting in a 2-1 decision, rejecting the company's argument that the ban was arbitrary, unauthorized and unconstitutional.

In Tuesday's filing, Anthropic's lawyers said the court ignored 'straightforward evidence the designation was retaliation for Anthropic's speech about AI safety.'

A representative for Anthropic declined to comment beyond the filing, and the Pentagon did not immediately respond to a request for comment.

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Analysis

Why This Matters

  • The case could determine whether the US government can effectively blacklist an AI contractor for publicly refusing certain military uses of its technology.
  • It tests how far procurement law can be used to respond to corporate speech on AI safety, with implications for other AI companies working with the Pentagon.
  • The outcome will help shape the rules for AI in US defence, including the use of models in surveillance and autonomous weapons.

Background

Anthropic is one of the leading US AI companies and has built its reputation partly on a strong emphasis on safety. The US military has been integrating commercial AI tools into its operations, and debate over the acceptable uses of AI in warfare, particularly lethal autonomous systems, has been running for years. The 'supply chain risk' designation is a procurement tool normally used to exclude suppliers considered national security risks. The legal question here is whether it can be applied to a contractor based on its policy positions rather than its conduct.

Key Perspectives

Anthropic: Says the designation was retaliation for its AI safety commitments and its public explanation of those commitments, and that its models help defend the nation. The Defense Department: Won the case in the D.C. Circuit, where a 2-1 panel rejected Anthropic's claims that the ban was arbitrary, unauthorized and unconstitutional. Critics and skeptics: The split decision shows genuine judicial disagreement over the scope of the department's authority. Some may argue courts should defer to the military on supply chain decisions, while others see the case as a test of whether national security powers can be used to chill corporate speech.

What to Watch

  • Whether the full D.C. Circuit agrees to rehear the case
  • Any formal response from the Pentagon to the petition
  • Anthropic's investor disclosures, with the company reportedly poised to release new revenue figures ahead of an anticipated S-1 filing

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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