Appeals court upholds Pentagon's supply-chain-risk label on Anthropic
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.
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- DevelopmentPentagon labels Anthropic a supply-chain risk after it refuses to drop two limits27 Feb 2026 · Enforcement or ruling · USFollows from: Merits ruling on the February designation
What led here
Earlier developments on the same thread
- DevelopmentOpenAI agrees to deploy its models on Department of War classified networks28 Feb 2026 · Deal · US
- DevelopmentHegseth orders an 'AI-first' military and 'any lawful use' terms for AI contracts12 Jan 2026 · Policy · US
- DevelopmentDepartment of War launches GenAI.mil with Google's Gemini for Government9 Dec 2025 · Launch · US
- DevelopmentPentagon AI office awards Anthropic, Google, OpenAI and xAI up to $200m each14 Jul 2025 · Procurement · US
What happened next
Later developments on the same thread
- DevelopmentThird Circuit upholds ruling that ROSS's AI training on Westlaw was not fair use29 Sep 2026 · Enforcement or ruling · US
- DevelopmentHegseth launches Project Meridian with Musk, Luckey and Gingrich to plan future war30 Sep 2026 · Programme · US
- DevelopmentPentagon plans four-star Autonomous Warfare Command by October 202730 Sep 2026 · Programme · US
- DevelopmentOpenAI ties large reasoning-distillation campaign to people linked to Moonshot AI30 Sep 2026 · Incident · US, CN
Same story elsewhere
What other countries and bodies did on this
- DevelopmentNATO buys Palantir's Maven Smart System for its operational headquarters14 Apr 2025 · Procurement · INTL
- DevelopmentUK Strategic Defence Review bets on AI, autonomy and a 'digital targeting web'2 Jun 2025 · Policy · GB
- DevelopmentEU White Paper on defence lists AI and drones among priority capability gaps19 Mar 2025 · Policy · EU
- DevelopmentCSET study of PLA tenders maps China's military AI shopping list17 Feb 2026 · Research · CN
Rules in play
Laws and guidance this touches
- RuleEO 14409 (covered frontier models)US · In force · 2 Jun 2026
- RuleBIS H200 case-by-case ruleUS · In force · 15 Jan 2026
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