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Appeals court upholds Pentagon's supply-chain-risk label on Anthropic

Enforcement or rulingDefenceFrontierGovernmentUSReported

A divided D.C. Circuit panel (Judges Katsas and Rao, Judge Henderson dissenting) upheld the Department of War's exclusion of Anthropic as a supply-chain risk under the Federal Acquisition Supply Chain Security Act (FASCSA), holding that vendor-imposed usage restrictions can count as a supply-chain risk without malicious intent. A federal court in Northern California had ruled for Anthropic in August on the department's other statutory basis, so the FASCSA designation stands while Anthropic weighs en banc or Supreme Court review.

Why it matters

Courts are deferring to the military on whether a lab's usage limits make it a security risk, which strengthens the government's hand in setting terms for frontier AI vendors.

SourceNextgov/FCWCoverage: Herbert Smith Freehills Kramer (case analysis)Coverage: Clark Hill Based on credible reporting; we could not open the primary document. Independently fact-checked on 7 Oct 2026.
AnthropicDepartment of WarU.S. Court of Appeals for the D.C. Circuit

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The Pentagon, the labs and the limits on useStop 7 of 8Who supplies the AI-first military?Stop 8 of 9Procurement as AI policyStop 6 of 7

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