On Friday, a 2–1 panel of the U.S. Court of Appeals for the D.C. Circuit upheld the Pentagon’s decision to exclude Claude from its supply chain under the Federal Acquisition Supply Chain Security Act. The ruling followed Anthropic’s refusal to remove contract limits on using its model for lethal autonomous weapons and domestic surveillance. The majority said those safeguards could prevent Claude from carrying out lawful military tasks and pose a supply-chain risk, even without evidence of intent to harm. Judge Karen Henderson dissented, reading the statute narrowly as covering sabotage or deliberate interference and saying Anthropic’s safeguards did not fit.

The ruling governs Pentagon procurement under that law. It does not resolve a separate challenge to the administration’s parallel effort to bar Anthropic across federal agencies, reviewed by another court under a different statute. For defense AI suppliers, the case shows how contractual safeguards can be treated as national-security risks when they conflict with a customer’s expected use. The majority stressed the Pentagon’s need for systems it can rely on for lawful tasks; the dissent emphasized the statute’s text and absence of malicious conduct. As AI enters military operations, the case leaves a hard question: who sets limits on systems used in lethal operations, and how much control can government demand from vendors? Anthropic is considering further review.