Court upholds Pentagon's supply-chain risk label on Anthropic

A federal appeals court has ruled that the Pentagon can classify AI company Anthropic as a supply-chain risk, rejecting the startup's argument that the designation infringed on its legal rights. The decision came from a divided panel of judges who sided with the Trump administration's position.

The ruling means the government-imposed label will stand, potentially affecting how federal agencies engage with Anthropic on contracts and procurement. Anthropic had pushed back against the designation, arguing it was improperly applied and harmful to the company.

The case highlights growing tension between fast-moving AI firms and government efforts to police supply-chain security, particularly for companies whose technology intersects with national security concerns.