US Appeals Court Rules Trump Administration Can Blacklist Anthropic

A US appeals court has approved the Department of Defense blacklisting of Anthropic technology. Judges decided the Trump administration holds the authority to blacklist Anthropic for withholding specific artificial intelligence features from the military.

The 2-1 ruling came from the US Court of Appeals for the District of Columbia Circuit. The panel of judges noted the case raises difficult questions concerning military uses of powerful new technology.

The US government raised concerns that overly constrained artificial intelligence models could shut down unexpectedly and cause military operations to fail. Meanwhile, Anthropic raised concerns that unconstrained models might hallucinate inappropriate targets for lethal force.

President Donald Trump and Defense Secretary Pete Hegseth must determine how best to balance these competing risks. The court stated that the Secretary did not exceed limits on his authority under the Supply Chain Security Act or the Constitution, leading to the denial of the petitions for review.

The two judges who ruled against Anthropic were appointed by Trump and served in the first Trump administration. Judge Gregory Katsas served as deputy counsel to the president, and Judge Neomi Rao served in the Office of Management and Budget.

Anthropic filed a lawsuit against the Trump administration in March. The action followed an order telling federal agencies to stop using Anthropic products and banning defense contractors from doing business with the company. Anthropic may appeal the latest ruling through an en banc review or by petitioning the Supreme Court.

An Anthropic spokesperson stated that the company respectfully disagrees with the decision. The spokesperson noted that another federal court held the government parallel designation unlawful, and that the company remains confident in its position.

Despite ongoing legal disputes, Commerce Secretary Howard Lutnick recently stated that the Trump administration and Anthropic have patched up their relationship and are in tune. Two different courts have been reviewing the blacklisting action.

A judge in the US District Court for the Northern District of California ruled last month that the action was illegal. That court found Anthropic did not meet the definition of a supply-chain risk restricted to adversaries subverting covered systems.

The DC Circuit did not dispute the district court primary finding. However, the appeals court held exclusive jurisdiction to review the procurement actions under a separate and broader statute, designated as 41 U.S.C. § 4713.

The dissenting vote came from Judge Karen Henderson, a George H.W. Bush appointee. Henderson disagreed with the majority interpretation of the statute, arguing that the law targets deliberate infiltration by hostile nation-states and bad actors rather than honest enforcement of use restrictions.