Anthropic loses appeal over supply chain risk label

Apr 8, 2026

A federal appeals court in Washington D.C. denied Anthropic's request to block the Pentagon's supply chain risk designation, making it the first American company to receive a label historically reserved for foreign adversaries. The dispute originated when negotiations over a $200 million Pentagon contract stalled in September because Anthropic sought assurances its technology wouldn't be used for autonomous weapons or mass surveillance, while the DOD demanded unfettered access. Defense Secretary Pete Hegseth declared Anthropic a supply chain risk in late February following President Trump's order for agencies to cease using Anthropic's technology with a six-month phase-out. While the appeals court ruled against Anthropic citing national security priorities during active military conflict, a separate San Francisco court injunction allows Anthropic to continue working with non-DOD government agencies during litigation.

Federal court rulings on Anthropic's supply chain risk designation

▪A judge in San Francisco federal court late last month granted Anthropic a preliminary injunction that bars the Trump administration from enforcing a ban on the use of Anthropic's Claude model.

Pentagon's justification and government response to the blacklisting

▪The DOD notified Anthropic of the official supply chain risk determination via a letter soon after Pete Hegseth's post on X.
▪Todd Blanche wrote that military authority and operational control belong to the Commander-in-Chief and Department of War, not a tech company.
▪The DOD declared Anthropic a supply chain risk in early March, meaning that use of Anthropic's technology purportedly threatens U.S. national security.
▪Todd Blanche, the acting U.S. attorney general, called the federal appeals court decision a resounding victory for military readiness.
▪Defense Secretary Pete Hegseth declared Anthropic a supply chain risk in a post on X in late February.
▪President Donald Trump wrote a Truth Social post ordering federal agencies to immediately cease all use of Anthropic's technology shortly before Pete Hegseth's post.
▪President Donald Trump said there would be a six-month phase-out period for agencies like the DOD to cease use of Anthropic's technology.

Background of the dispute between Anthropic and the Department of Defense

▪As Anthropic began negotiating Claude's deployment on the DOD's GenAI.mil AI platform in September, talks stalled.
▪Anthropic signed a $200 million contract with the Pentagon in July.
▪The Trump administration's actions surprised many officials in Washington, where Anthropic's technology had become embedded in numerous agencies.