D.C. Circuit upholds Pentagon supply-chain blacklist of Anthropic

25 Sep 2026 (ET): The U.S. Court of Appeals for the D.C. Circuit ruled 2–1 that the Defense Department’s March supply-chain risk designation of Anthropic can stand, leaving military and contractor bans on Claude in place under that statute while Anthropic weighs further review.

POLITICS desk — a supply-chain risk label is how the Pentagon keeps a product off military computers and out of the work defense contractors do for the department. If Friday’s ruling stands, Claude stays off those jobs under that statute, even while a San Francisco court has already called a parallel designation unlawful. Contractors who build for the department have to choose tools the Pentagon will accept. The model is dual-use: software sold for ordinary work, with the company’s own limits on fully autonomous weapons and on watching large numbers of people inside the country, and a military that wanted those limits lifted. Anthropic’s path toward a public listing is a separate story. A ban that lasts closes that government customer while the listing path is still open.

Who signed the opinion, as CNBC prints it. Circuit Judge Gregory Katsas wrote the majority. Circuit Judge Neomi Rao joined it. CNBC says both were appointed by President Donald Trump. Circuit Judge Karen LeCraft Henderson dissented. CNBC says she was appointed by former President George H.W. Bush. Those appointment lines are CNBC’s.

The sentence Katsas wrote, as CNBC quotes it. “The Department had ample support for its conclusion that the continued integration of Claude into the Department’s information systems, by the Department or its contractors, presented a statutorily covered national-security risk.” Statutorily covered means the risk is one the statute names. CNBC says the 2–1 decision rejected Anthropic’s argument that the Defense Department’s ban on its Claude models was arbitrary, unauthorized, and unconstitutional. Those three words are CNBC’s summary of the company’s argument.

What the March label does, in CNBC’s words. In March the Department of Defense labeled Anthropic a supply-chain risk, after talks about how the military could use Claude spiraled out of control. CNBC’s gloss is that the company purportedly threatened U.S. National security. Purportedly is CNBC’s word. The designation prevents the U.S. Military from using Anthropic’s models and blocks defense contractors from using them in their work with the agency. A defense contractor is a company paid to do work for the department. The military ban and the contractor ban are two limits. CNBC does not say Claude is banned for every civilian customer.

What the fight was about, as CNBC tells it. The department wanted Anthropic to grant the military unfettered access to its models across all lawful purposes. Anthropic wanted assurance that the technology would not be used for fully autonomous weapons or domestic mass surveillance. Fully autonomous, here, means a weapon that can pick a target and fire without a person in that decision. Domestic mass surveillance means watching large numbers of people inside the country. Unfettered and all lawful purposes are CNBC’s phrases. The two sides could not agree. Defense Secretary Pete Hegseth accused Anthropic of attempting to “to seize veto power over the operational decisions of the United States military.” The words inside the quotation marks are CNBC’s. Veto power, in that accusation, means a private company could say no to a military operation.

Two courts, and two outcomes. CNBC says Anthropic sued the Trump administration in March in U.S. District Court in San Francisco and in the D.C. Circuit, to reverse the blacklisting. Blacklisting is CNBC’s word for the designation. The department relied on two distinct designations, so the fight ran in two courts. A San Francisco federal judge ruled last month that one designation was illegal. Friday’s D.C. Ruling upheld the second. Last month, and illegal, are CNBC’s words for that earlier case. The page this desk read does not print that judge’s name, a case number, or a calendar date for the San Francisco order. One designation is down. The other is still up.

What Anthropic said, as CNBC quotes a spokesperson. “We respectfully disagree with the court’s decision.” “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.” Those three sentences are the spokesperson’s, given to CNBC. Parallel designation is the company’s phrase for the one the San Francisco court held unlawful. Further review is the company’s phrase.

The ruling does not take effect today. CNBC says the panel delayed the decision so Anthropic has time to petition the same three judges for a rehearing, or to seek an en banc rehearing by all the judges of the D.C. Circuit. Anthropic could also ask the Supreme Court to take the case. En banc means the full appeals court, not only the panel of three. Could, and time to petition, are CNBC’s.

The contract that came before the break, as CNBC’s background, not as a new deal. Before the fight was public, Anthropic was an early partner across many U.S. Agencies, including the department. It signed a $200 million contract with the Pentagon in July 2025. Talks then started on putting Claude on the department’s GenAI.mil platform that September, and the talks collapsed. Read against July 2025, that September is September 2025. $200 million and GenAI.mil are CNBC’s.

Who Katsas says gets to decide, as CNBC quotes him. He said Hegseth raised the “deeply sobering” idea that “overly constrained” models could shut down unexpectedly, and that Claude might be “subject to manipulation.” CNBC says Anthropic refuted those claims. Refuted is CNBC’s verb. Katsas wrote: “In our Republic, it is the President and the Secretary of War who must determine how best to balance the competing risks.” And: “In doing so here, the Secretary did not transgress any limits on his authority under the Supply Chain Security Act or the Constitution.” Secretary of War is the title inside that quotation, as CNBC prints it. Supply Chain Security Act is the statute name inside that quotation. Transgress, in that sentence, means he did not step outside the statute or the Constitution.

Color in the same CNBC article that is not Friday’s holding. CNBC recaps a Monday Truth Social post in which President Trump said his administration has stopped AI people from doing bad or potentially bad things, and named Anthropic’s chief executive, Dario Amodei. CNBC also says Amodei was not invited to a Thursday state dinner for China’s President Xi Jinping. Those lines are CNBC’s background. This filing is the Friday ruling.

What the card shows. The card is a licensed aerial photograph of the Pentagon in Arlington, Virginia, the headquarters of the Department of Defense named in the ruling. The five-sided building, the roads, and the parking lots sit inside a charcoal margin. The photograph has no date printed on it. It is not the picture on CNBC’s page. CNBC credits an aerial to Daniel Slim of AFP via Getty and dates that frame 31 May 2026. This filing does not use that frame. Credit on this card is mariordo59 via Wikimedia Commons, under the Creative Commons Attribution-ShareAlike 2.0 license.

Plain English for the rest of the card. On Friday a Washington appeals court said the Pentagon may keep a March label on Anthropic. Two judges said yes. One said no. The label stops the U.S. military from using Claude. It also stops defense contractors from using Claude on work they do for the department. The break started because Anthropic would not drop its limits on fully autonomous weapons and on mass surveillance inside the country, and the defense secretary said the company was trying to hold a veto over military decisions. A judge in San Francisco last month threw out a different designation. This one is still up, and it does not take effect immediately. Anthropic says it disagrees and is looking at further review. The card is the Pentagon from the air.