Anthropic has asked a federal appeals court in Washington, D.C. to take a second look at its case against the Pentagon, which designated the AI company a national-security “supply chain risk” earlier this year [1][2].
The petition, filed on Tuesday 13 October 2026, asks the U.S. Court of Appeals for the D.C. Circuit for either a panel rehearing (the same three judges reconsider) or a rehearing en banc (the full court hears the case) [1]. On 25 September, a three-judge panel upheld the designation by a 2-1 vote [1][2].
What the designation means
A “supply chain risk” designation lets the Defense Department, which the administration now calls the Department of War, shut a supplier out of its purchasing on national-security grounds. According to CNBC, the September decision rejected Anthropic’s argument that the ban on its Claude models was “arbitrary, unauthorized and unconstitutional” [2]. CNBC also noted that Anthropic had signed a $200 million contract with the Pentagon in July 2025 before talks over deploying Claude broke down [2].
What Anthropic argues
The petition opens bluntly: “The Secretary of War branded Anthropic—an American AI company whose models help defend the nation—a national-security ‘supply chain risk’ because it declined to permit its models to be used for mass surveillance of Americans or lethal autonomous warfare and publicly explained those AI-safety commitments.” It adds: “A divided panel upheld that extraordinary designation.” [1]
Anthropic’s lawyers make three main points [1]:
- The law was stretched. The petition says the majority read the statute, 41 U.S.C. § 4713, to allow a designation “based on pre-deployment model training—a feature of all AI models”. It argues the majority “transformed a statute aimed at hostile foreign actors into one that presumptively reaches every government contractor.”
- There was no process. It says the designation was allowed “without any pre-designation process”.
- It was retaliation. It points to what it calls “straightforward evidence the designation was retaliation for Anthropic’s speech about AI safety.”
The petition also notes that the majority “did not credit the Secretary’s accusation that Anthropic had subversive intent” [1].
What is at stake
Anthropic has said the blacklisting has cost it “billions of dollars in lost business”, Reuters reported [3]. That is the company’s own estimate, and it has not published a breakdown.
Full-court rehearings are rare. The court can refuse the petition, in which case the September ruling stands and Anthropic’s remaining route would be the Supreme Court.
What this means
- The case is not over. The designation stays in place while the court decides whether to rehear it.
- The question is bigger than one company. Anthropic is arguing that if the ruling stands, any government contractor could face the same designation.
- AI safety limits are on trial. At the heart of the dispute is whether an AI company can refuse certain military uses of its models without being treated as a security threat.
Sources
- Anthropic PBC v. U.S. Department of War, D.C. Cir. Nos. 26-1049 and 26-1162, Petition for Panel Rehearing or Rehearing En Banc, filed 13 October 2026. https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rmBgeZtaYRQg/v0
- CNBC, “Anthropic urges court in Washington, D.C. to rehear appeal of Pentagon blacklisting”, 13 October 2026. https://www.cnbc.com/2026/10/13/anthropic-wants-court-in-dc-to-rehear-appeal-of-pentagon-blacklist-.html
- Reuters, “Anthropic seeks rehearing of case over Pentagon’s security risk branding”, 13 October 2026 (as published by The Economic Times). https://economictimes.indiatimes.com/tech/artificial-intelligence/anthropic-seeks-rehearing-of-case-over-pentagons-security-risk-branding/articleshow/134930323.cms
