Appeals Court Backs Pentagon Risk Label on Anthropic
A divided federal appeals panel in Washington ruled 2-1 on September 25, 2026 that the Pentagon may keep Anthropic off military contracts.
In short
The Pentagon can keep its national-security supply-chain risk designation for Anthropic, and with it the company's exclusion from military contracts, after a federal appeals court in Washington upheld the label 2-1 on September 25, 2026.
At a glance
- Federal appeals court in Washington, decided September 25, 2026, by a 2-1 vote in the Pentagon's favor.
- The label bars Anthropic from military contracts; The Decoder reports it has cost the company billions of dollars.
- Trigger: Anthropic bars use of its models for autonomous weapons and mass surveillance.
- Defense Secretary Pete Hegseth treats those limits as a risk to military operations.
- In late August a federal judge in San Francisco blocked a parallel designation as unlawful retaliation.
The Pentagon may go on treating Anthropic as a national-security supply-chain risk. A federal appeals court in Washington ruled 2-1 against the AI lab on September 25, 2026, leaving it shut out of Defense Department contracts. Anthropic rejects the outcome and says it is weighing what to do next.
How the dispute started
Anthropic does not allow its models to be used for autonomous weapons or for mass surveillance. Defense Secretary Pete Hegseth has framed those limits as a hazard to military operations. The department then tagged the vendor as a supply-chain security risk, a label that closes off procurement in practice.
What the decision actually settles
The question before the panel was not whether Anthropic's usage rules are wise, but whether the Pentagon was entitled to apply the designation. A majority said it was. The Decoder reports the label has already cost the company billions of dollars and weighed on its planned stock market listing; neither the company nor the department has put an official figure on the damage that we could confirm.
Intelligence agencies remain customers
Military procurement stays closed, yet U.S. intelligence agencies are described in the same report as heavy users of Anthropic's models. The identical technology is a liability in one part of the government and a working tool in another. Technology executives and former military officials have lined up behind the company.
A second case went the other way
In late August a federal judge in San Francisco struck down a parallel designation issued under a different statute, calling it unlawful retaliation. Anthropic argues the Pentagon label is likewise payback for its safety choices. The Trump administration, for its part, casts the company as politically left-leaning.
What we could not verify
The source we were able to read does not name the judges or set out the dissent's reasoning. Wired's account of the ruling was not retrievable for us, so we cannot describe in detail which rights Anthropic claims were violated. Whether the company will seek review by the full court or the Supreme Court is also still open.
FAQ
Can the Pentagon keep Anthropic out of military contracts?
Yes. On September 25, 2026 a federal appeals court in Washington upheld the supply-chain risk designation 2-1, so the exclusion from Defense Department contracts stands.
Why did the Pentagon label Anthropic a supply-chain risk?
Because Anthropic refuses to let its models be used for autonomous weapons and mass surveillance. Defense Secretary Pete Hegseth treats those restrictions as a risk to military operations.
Do U.S. intelligence agencies still use Anthropic's models?
According to The Decoder's report, yes: intelligence agencies remain heavy users even though military procurement is blocked.
