A US federal appeals court has upheld the Pentagon’s decision to designate AI company Anthropic as a national security supply-chain risk, rejecting the company’s challenge to its exclusion from military contracts.
The 2-1 ruling by the US Court of Appeals in Washington, DC, marks a significant development in the dispute between Anthropic and the US government over restrictions the company places on the use of its artificial intelligence systems.
The Pentagon had taken action against Anthropic after the company declined to permit its technology to be used for autonomous weapons and mass domestic surveillance. The appeals court majority found that the government’s concerns over the potential impact of Anthropic’s safeguards on military operations were reasonable.
Writing for the majority, Judge Gregory Katsas said the government had raised concerns that tightly constrained AI systems could potentially stop operating unexpectedly, creating risks for military missions.
The court also rejected Anthropic’s argument that the Pentagon’s action amounted to retaliation over the company’s positions on AI safety and ethics.
Anthropic said it disagreed with the ruling but remained confident in its position. The company said it was considering its available options, including asking the full appeals court to review the three-judge panel’s decision.
The dispute stems from months of negotiations between Anthropic and the government that ultimately broke down. The company had maintained that its restrictions were necessary because current AI systems were not sufficiently reliable for autonomous weapons, while also opposing the use of its technology for domestic surveillance on fundamental-rights grounds.
The latest ruling is not the only court decision involving the government’s actions against Anthropic. A federal judge in San Francisco had previously struck down a separate designation under another law, finding that the administration had unlawfully retaliated against the company over its AI-safety positions. That court also blocked a government-wide ban on Anthropic and an order preventing military contractors from doing business with the company.
The conflicting rulings leave the broader legal fight over Anthropic’s relationship with the US government unresolved, with further proceedings possible as the company weighs its next legal steps.
