SCOUTUS overturns federal judge, rules Anthropic a supply chain risk.
On Wednesday, April 8, the U.S. Court of Appeals in Washington, D.C. rejected artificial intelligence research lab Anthropic’s request to block the Pentagon from blacklisting the company and labeling it as a supply chain risk. This comes after a federal judge in San Francisco conversely ordered a preliminary injunction against the Pentagon and halted the Trump administration’s directive for government employees to stop using Anthropic’s technology earlier last month.
These conflicting court decisions represent the latest developments in the legal battle between the Anthropic and President Donald Trump’s administration. However, this fraught state of affairs has only developed relatively recently with Anthropic even being one of several recipients of contracts worth up to $200 million awarded by the Department of Defense last summer and the first of such companies to be cleared for classified use.
At the time, the contract signaled a positive step in the relationship between both parties. Anthropic’s Head of Public Sector, Thiyagu Ramasamy, described it as “a new chapter in Anthropic’s commitment to supporting U.S. national security.” Yet this burgeoning relationship was not one to last, and disagreements over the military’s use of AI began to emerge, eventually escalating into the situation it is now.
According to The New Yorker, the Department of Defense sought to renegotiate certain stipulations in the contract. Specifically, the contract stated that Anthropic’s technologies can not be used for mass-surveillance or autonomous weapons. The military viewed this as being too restrictive and wanted the contract to state it could be used for “all lawful purposes.” These ethical restrictions were viewed by Anthropic as necessary and as setting a precedent for similar restrictions if/when AI companies work with the military in the future. The Department of Defense, in turn, argued that they do not even do mass surveillance in the first place, and so that stipulation was irrelevant.
Negotiations continued until President Trump, in a Truth Social post, announced in a, “THE UNITED STATES OF AMERICA WILL NEVER ALLOW A RADICAL LEFT, WOKE COMPANY TO DICTATE HOW OUR GREAT MILITARY FIGHTS AND WINS WARS!…Therefore, I am directing EVERY Federal Agency in the United States Government to IMMEDIATELY CEASE all use of Anthropic’s technology.” This was followed in March by the Department of Defense declaring Anthropic a “supply chain risk,” a designation typically used only for companies with ties to adversarial foreign governments.
In response, Anthropic immediately filed two cases in federal court, one in San Francisco and the other in D.C. The company argued in the lawsuits that the actions taken by the Pentagon and the Trump administration were an “unlawful campaign of retaliation” and asked the court to reverse the Pentagon’s supply chain risk designation, according to reporting by AP News.
The San Francisco lawsuit has already seen some early wins for Anthropic. NPR reported that U.S. District Judge Rita Lin ordered a preliminary injunction against the Pentagon, stating in the order that the designation of supply chain risk is not usually reserved for American companies. This has put a temporary pause on the Trump administration’s actions until further developments can be made in the case.
However, the appeals court in D.C. saw things differently this past week. The court refused to block the Pentagon from blacklisting Anthropic, and ,according to PBS, it did not see a “sufficient reason to issue its own order.” A hearing is scheduled for May 19th where more evidence is set to be brought forward.
