A federal appeals court has upheld the Pentagon's designation of AI startup Anthropic as a national security supply chain risk, barring the company from military contracts.
Key facts
- •The U.S. Court of Appeals for the District of Columbia issued a 2-1 decision favoring the Pentagon.
- •The ruling prevents the U.S. military and defense contractors from utilizing Anthropic's Claude AI models.
- •Anthropic previously sued the administration in two separate courts to challenge the dual designations.
- •A federal judge in San Francisco ruled in August that a separate, parallel designation against Anthropic was illegal.
- •Anthropic stated the blacklisting has negatively impacted its financial standing and IPO plans.
A federal appeals court in Washington, D.C., ruled 2-1 on Friday to uphold the Pentagon's decision to blacklist AI startup Anthropic. The court rejected the company's arguments that the Department of Defense's ban on its Claude models was arbitrary or unconstitutional. This decision confirms the Pentagon's classification of Anthropic as a national security supply chain risk, effectively prohibiting the U.S. military and its contractors from using the company's AI technology.
Court Ruling and Legal Context
The majority opinion, written by Judge Gregory Katsas and joined by Judge Neomi Rao, stated that the Department of Defense had sufficient support to conclude that integrating Claude into military systems posed a national security risk. Judge Karen LeCraft Henderson dissented from the decision. This ruling addresses one of two distinct designations used by the Department of Defense to justify its actions against the company.
Ongoing Legal and Political Conflict
The legal battle stems from a March designation following failed negotiations regarding military use of Anthropic's models. While the D.C. appeals court upheld this designation, a federal judge in San Francisco ruled last month that a separate, parallel designation was unlawful. Anthropic has stated it disagrees with the latest ruling and is considering its next steps. The company claims the blacklisting has cost it billions and impacted its planned IPO.
Timeline
- MarchThe Department of Defense designated Anthropic a supply chain risk and the company filed lawsuits in response.
- Late AugustA federal judge in San Francisco ruled that one of the two Pentagon designations against Anthropic was illegal.
- FridayThe U.S. Court of Appeals for the District of Columbia upheld the second Pentagon designation.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by The Decoder, CNBC Technology.
