US appeals court upholds Pentagon's blacklisting of Anthropic

On Friday, a federal appeals court in Washington, D.C. affirmed the Pentagon's decision to blacklist AI startup Anthropic from military contracts, a ruling that favors President Donald Trump and Defense Secretary Pete Hegseth in their dispute with the company over safety protocols for its technology. The 2-1 decision, delivered by the US Court of Appeals, stemmed from Anthropic's lawsuit challenging a March designation by the Pentagon as a national security risk.

The startup contends this designation has resulted in billions of dollars in lost revenue and reputational damage ahead of its anticipated IPO. The court ruled that the Pentagon's action was justified due to Anthropic's refusal to permit its products for use in autonomous weapons or mass surveillance, which the majority deemed reasonable.

Judge Gregory Katsas, in the majority opinion, cautioned that overly restrictive AI models could inadvertently disrupt military operations. Anthropic's legal team disagreed, arguing the Pentagon's move was an attempt to retaliate against the company's stance on AI ethics. The White House and Defense Department have yet to comment.

The court's decision comes after a federal judge in San Francisco recently blocked a similar Pentagon designation, citing unlawful retaliation against Anthropic's views on AI safety.