Anabelle Colaco
28 Sep 2026, 15:13 GMT+10

NEW YORK CITY, New York: A U.S. federal appeals court on September 25 declined to block a Pentagon order barring artificial intelligence startup Anthropic from military contracts and designating it a national security risk.

The U.S. Court of Appeals for the District of Columbia Circuit issued the ruling in a lawsuit brought by Anthropic challenging the Defense Department's designation.

The AI startup says the blacklisting has cost it billions of dollars in lost business and damaged its reputation ahead of its anticipated initial public offering.

Anthropic said in a statement that it respectfully disagrees with the decision but remains confident in its position. The company is considering its options, including further judicial review.

The appeals court's decision follows a separate ruling in San Francisco last month involving a parallel Pentagon designation under a different law.

Last month, a federal judge in San Francisco struck down a parallel designation under a different law, finding that the administration had unlawfully retaliated against Anthropic for its views on AI safety.

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