A federal appeals court upheld the Pentagon’s decision to ban artificial intelligence (AI) company Anthropic from military contracts, delivering a win to President Donald Trump and Defense Secretary Pete Hegseth following disputes over the technology company’s safety guardrails.  A move in the right direction.

     In a 2-1 decision the United States Court of Appeals in Washington, D.C., rejected Anthropic’s lawsuit over the Pentagon’s March decision to designate the company a national security supply chain risk.   Anthropic claims the designation has cost it billions in lost business and harmed its reputation ahead of a major upcoming IPO.  The court’s majority ruled that the Pentagon was justified in designating Anthropic as a supply chain risk after the company prohibited its products from being used for mass surveillance or autonomous weapons. Consequently, the judges rejected Anthropic’s argument that the government was retaliating against its AI safety and ethics policies. 

     Anthropic claims the designation has cost it billions in lost business and harmed its reputation ahead of a major upcoming IPO.

The court’s majority ruled that the Pentagon was justified in designating Anthropic as a supply chain risk after the company prohibited its products from being used for mass surveillance or autonomous weapons. Consequently, the judges rejected Anthropic’s argument that the government was retaliating against its AI safety and ethics policies.