Court Sides With Pentagon in AI Dispute
A federal appeals court in Washington, D.C. has denied artificial intelligence company Anthropic's emergency motion to temporarily suspend its designation by the Pentagon as a supply chain risk. The three-judge panel ruled late Wednesday that the company did not satisfy the stringent legal requirements for an emergency stay, though it did agree to expedite the full appeal.
Legal Split and Expedited Timeline
The decision creates a split with a federal court in California, which last month temporarily blocked the same designation. Anthropic has filed parallel lawsuits in both jurisdictions challenging the Pentagon's label—typically applied to foreign entities—and a related directive from President Trump ordering civilian agencies to cease using its products. Oral arguments for the expedited appeal are scheduled for May 19.
The core of the dispute lies in contractual control. Anthropic has demanded its Claude AI model not be used in fully autonomous lethal weapons or for mass surveillance of U.S. citizens. The Pentagon, however, has insisted on a contract permitting "all lawful uses," a stance the court's order implicitly supported by denying the stay.
Weighing Harms and National Security
In its order, the panel acknowledged Anthropic would likely face "some degree" of irreparable harm without a stay, though it found the precise financial impact unclear. The company's lawyers have argued the designation threatens billions in revenue. Notably, the judges suggested the public legal battle may have actually benefited Anthropic financially, citing a surge in app store downloads during the dispute.
The court placed greater weight on the government's national security arguments. The panel stated that granting a stay would force the U.S. military to "prolong relations with an unwanted vendor of critical AI services" during the ongoing military conflict with Iran. This reflects a broader administration stance on securing defense technology, as seen when the National Trust rejected the Trump administration's national security claim in a separate dispute over White House access.
"In our view, the equitable balance here cuts in favor of the government," the panel wrote. "On one side is a relatively contained risk of financial harm to a single private company. On the other side is judicial management of how, and through whom, the Department of War secures vital AI technology during an active military conflict." The panel included two Trump appointees, Judges Neomi Rao and Gregory Katsas, and Judge Karen LeCraft Henderson, appointed by George H.W. Bush.
Official Reactions and Broader Context
Acting Attorney General Todd Blanche hailed the ruling as a "resounding victory for military readiness." In a statement on social media, Blanche asserted, "Our position has been clear from the start—our military needs full access to Anthropic's models if its technology is integrated into our sensitive systems. Military authority and operational control belong to the Commander-in-Chief and Department of War, not a tech company."
An Anthropic spokesperson responded, saying the company is "grateful the court recognized these issues need to be resolved quickly and confident the courts will ultimately agree that these supply chain designations were unlawful." The spokesperson added that while litigation was necessary, the firm's focus remains on "working productively with the government to ensure all Americans benefit from safe, reliable AI."
The case unfolds against a volatile geopolitical backdrop where the administration is balancing military posture with diplomatic channels. This is evident as the Pentagon prepares to detail its Iran stance following a presidential pause in strikes and announced negotiations. The court's deference to the executive branch on matters of conflict-time procurement signals a high hurdle for tech companies challenging national security designations.
