Anthropic Loses DC Circuit Appeal on Pentagon Claude Ban 2-1

A federal appeals court has ruled that Anthropic's own refusal to let the Pentagon use Claude for "fully autonomous lethal weapons and mass surveillance of Americans" is itself a supply-chain risk the Defense Department is entitled to blacklist over. The 2-1 decision Friday from a D.C. Circuit panel, reported by CNBC, keeps in place a ban that stops the U.S. military and defense contractors from using Anthropic's models.

Writing for the majority, Judge Gregory Katsas said the Defense 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." He noted that "on more than one occasion, these restrictions have stopped Claude from performing tasks requested by government users." Judge Neomi Rao joined the opinion.

Judge Karen LeCraft Henderson, a George H.W. Bush appointee, dissented. She wrote that the statute's word "manipulate" means covert or devious interference, and that "a contractor's honest and upfront enforcement of restrictions" does not fit. Openly enforced usage limits, on her reading, are not what the supply-chain-risk power was written to catch.

The dispute traces to negotiations in which the Pentagon sought Claude for "all lawful uses," and Anthropic loosened many restrictions but held its line on autonomous lethal weapons and domestic mass surveillance. On August 27, U.S. District Judge Rita F. Lin in San Francisco had struck down the Pentagon's designation as unconstitutional First Amendment retaliation, opening an active split between the two courts. The D.C. panel has stayed its decision to give Anthropic time to seek rehearing at the circuit or Supreme Court review.