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A divided D.C. Circuit panel upheld the Department of War’s designation of Anthropic as a supply-chain risk under 41 U.S.C. § 4713, barring its Claude AI model from the department’s supply chain and effectively blocking sales to federal agencies. The majority found that Anthropic’s ability to alter Claude through training, safety controls, and future model releases could inhibit lawful government-requested functions or military operations, including because its embedded restrictions had prevented some requested uses.
The court rejected Anthropic’s claim that the action unlawfully retaliated against the company for advocating AI safety, concluding the dispute concerned its refusal to grant an "all lawful uses" contractual authorization. A dissenting judge said the supply-chain statute was intended for hostile infiltration or interference with federal technology, not a vendor’s transparent enforcement of published use restrictions; related district-court proceedings had separately found the blacklisting retaliatory over Anthropic’s limits on lethal autonomous warfare and mass surveillance of Americans.
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In 2025, early commercial Claude models reportedly refused Centers for Disease Control and Prevention prompts intended to support infectious-disease prevention research. Anthropic said the refusals were safety features and that its engineers resolved them with government stakeholders.
A 2-1 D.C. Circuit panel denied Anthropic's petitions for review and upheld the Department's designation under 41 U.S.C. § 4713. The court held that Anthropic's continuing influence over Claude through training, embedded restrictions, and new-model deliveries could support a supply-chain-risk finding, and rejected Anthropic's First Amendment retaliation claim.
Judge Rita Lin of the Northern District of California found that the administration's blacklisting of Anthropic unlawfully retaliated against the company after it refused to remove restrictions on lethal autonomous warfare and mass surveillance of Americans. She determined the blacklisting violated the First Amendment.
Secretary Hegseth designated Anthropic as a supply-chain risk under 10 U.S.C. § 3252 and 41 U.S.C. § 4713, excluding Anthropic and its Claude model from the Department of War supply chain. The designation was described as preventing Claude sales to federal agencies, including non-military agencies.
In a February 27 social-media post, Secretary Pete Hegseth criticized Anthropic's “sanctimonious rhetoric,” “virtue-signaling,” and “Silicon Valley ideology.”
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A U.S. District Court ruled that the Defense Department unlawfully labeled Anthropic a supply-chain security risk and barred the AI company from federal work. Judge Rita Lin found insufficient evidence that Anthropic’s models posed a meaningful national-security threat, including claims it could use a purported model “kill switch” to sabotage systems, and ordered the designation removed. The court held that the action was unlawful retaliation for Anthropic’s protected objections to using its AI for mass surveillance and autonomous lethal weapons, finding violations of the company’s First Amendment and Fifth Amendment due-process rights. The designation followed a dispute over a $200 million Pentagon contract for AI on classified systems and had prohibited military contractors and suppliers from working with Anthropic; the administration may appeal, while a separate Anthropic case in the D.C. Circuit remains pending.
Aug 31, 2026
A federal judge in California temporarily blocked the U.S. Department of Defense from enforcing its designation of Anthropic as a national security **“supply chain risk,”** a move that had threatened to cut the AI company off from federal work and pressure contractors to stop using its technology. The dispute began after President Donald Trump and Defense Secretary Pete Hegseth moved to halt government use of Anthropic tools and formally label the company a risk following Anthropic’s refusal to permit uses tied to **mass surveillance of Americans** and **fully autonomous lethal targeting**. Anthropic sued, arguing the government retaliated against protected speech and imposed the designation without notice or a meaningful chance to respond. In granting a preliminary injunction, the court said Anthropic was likely to succeed on First Amendment, due process, and Administrative Procedure Act claims, finding the government’s stated sabotage and wartime-disablement rationale appeared unsupported and that the relevant law was likely misapplied. The ruling came after public criticism from Sen. Elizabeth Warren, internal Pentagon guidance allowing limited exemptions because Anthropic tools were difficult to remove from some systems, and reports that federal agencies continued testing Anthropic’s cyber-focused **Mythos** model despite the ban. Subsequent White House discussions signaled the administration may soften its stance even as the Pentagon expanded AI deals with other major tech firms and litigation over Anthropic’s federal status continued.
Jun 29, 2026
Anthropic alleged that three China-based AI labs—**DeepSeek, Moonshot AI, and MiniMax**—used roughly **24,000 fraudulent accounts** to generate more than **16 million interactions** with Claude in a coordinated effort to extract the model’s advanced reasoning, coding, and tool-use capabilities. The company said it linked the activity through IP correlations, request metadata, and infrastructure indicators, and warned that large-scale unauthorized distillation could remove safety guardrails and enable copied capabilities to be used in offensive cyber operations, disinformation, intelligence collection, and mass surveillance. Anthropic said it shared its findings with U.S. government entities and industry partners, while noting it had no evidence that the Chinese government directly coordinated the campaigns. The allegations surfaced as Anthropic remains in a separate high-stakes dispute with the U.S. Department of Defense, which on June 4 refused to reverse the company’s designation as a supply-chain risk. Anthropic is challenging the Pentagon’s March blacklisting after Defense Secretary Pete Hegseth invoked emergency powers following failed talks over limits on Claude’s use for domestic surveillance and autonomous weapons. Federal attorneys told the court the procedural dispute over administrative remedies is now moot because the secretary has denied reconsideration, and reporting indicates a majority of the appellate panel appeared inclined to let the designation stand while the case proceeds.
Jun 29, 2026