Appeals court upholds Pentagon's Anthropic designation 2-1

The legal fight traces back to earlier this year, when the Pentagon sanctioned Anthropic under a pair of separate supply-chain laws to remove Claude from the military and other parts of the federal government by this month. Because the laws designating Anthropic had to be challenged in separate courts, the two labels have moved on separate tracks. A federal judge in San Francisco tossed out one label in March and confirmed that decision last month, but Friday's ruling leaves the other in place.

The appeals court decision was somewhat expected. In April the same panel declined to temporarily block the designation after finding Anthropic failed to meet "stringent requirements" for an immediate reprieve. During a hearing, the three judges challenged both sides and appeared divided, and the final vote came 2-1. The majority rejected Anthropic's due process and free speech claims, saying the government followed procedure and that the dispute was standard contract negotiations.

For now, the Pentagon and much of the rest of the Trump administration can continue to steer clear of Claude. The outcome may ultimately hinge on whether Anthropic persuades a broader panel or the Supreme Court to take up its arguments, and on how quickly the Pentagon replaces Claude with alternatives. Both rulings face the prospect of years of appeals before being fully resolved.