A federal appeals court has rejected Anthropic\u2019s bid to temporarily halt the Pentagon\u2019s labeling of the artificial intelligence company as a supply chain risk, finding the firm failed to meet the strict requirements for an emergency stay.<\/p>\n\n\n\n
The order, issued Wednesday evening by a three-panel judge in Washington, D.C., blocked Anthropic\u2019s bid to pause the designation but granted its request to expedite the case. Oral arguments are slated to begin May 19.<\/p>\n\n\n\n
The decision breaks from that of a federal judge in California, who temporarily blocked the supply chain risk designation in a ruling late last month.<\/p>\n\n\n\n
Anthropic filed suits in both California and D.C. contesting both the Pentagon\u2019s designation, which is typically reserved for foreign adversaries, and President Trump\u2019s directive for civilian agencies to stop using Anthropic\u2019s products.<\/p>\n\n\n\n
Anthropic demanded its technology not be used in fully autonomous lethal weapons or for the mass surveillance of Americans. The Pentagon has insisted it be allowed to use Anthropic\u2019s Claude for \u201call lawful uses.\u201d<\/p>\n\n\n\n
The appeals panel recognized Anthropic is likely to face \u201csome degree\u201d of irreparable harm without a stay, though the exact amount of Anthropic\u2019s financial harm is not \u201cfully clear,\u201d the order stated.<\/p>\n\n\n\n
Anthropic\u2019s lawyers have argued the designation could cost the firm billions of dollars in revenue.<\/p>\n\n\n\n
Further, the judges suggested Anthropic actually benefited financially given the surge in app store downloads amid its rift with the Pentagon.<\/p>\n\n\n\n
Meanwhile, the panel also recognized a stay would force the U.S. military to prolong relations with \u201can unwanted vendor of critical AI services\u201d amid the ongoing military conflict with Iran.<\/p>\n\n\n\n
\u201cIn our view, the equitable balance here cuts in favor of the government,\u201d the panel said. \u201cOn one side is a relatively contained risk of financial harm to a single private company. On the other side is judicial management of how, and through whom, the Department of War secures vital AI technology during an active military conflict.\u201d<\/p>\n\n\n\n
The panel consisted of two Trump appointees \u2014 Judges Neomi Rao and Gregory Katsas \u2014 along with Judge Karen LeCraft Henderson, an appointee of former President George H.W. Bush.<\/p>\n\n\n\n
Acting Attorney General Todd Blanche lauded the D.C. Circuit order, calling it a \u201cresounding victory for military readiness.\u201d<\/p>\n\n\n\n
\u201cOur position has been clear from the start \u2014 our military needs full access to Anthropic\u2019s models if its technology is integrated into our sensitive systems,\u201d Blanche wrote in a post on the social platform X. \u201cMilitary authority and operational control belong to the Commander-in-Chief and Department of War, not a tech company.\u201d<\/p>\n\n\n\n
A spokesperson for Anthropic said the company is \u201cgrateful the court recognized these issues need to be resolved quickly and confident the courts will ultimately agree that these supply chain designations were unlawful.\u201d<\/p>\n\n\n\n
\u201cWhile this case was necessary to protect Anthropic, our customers, and our partners, our focus remains on working productively with the government to ensure all Americans benefit from safe, reliable AI,\u201d the spokesperson added.<\/p>\n\n\n\n