D.C. Circuit Upholds the Anthropic Ban: What It Means for Federal Contractors

Robyn N. Burrows, Michael J. Montalbano, and Justin A. Chiarodo ●


On September 25, 2026, the U.S. Court of Appeals for the D.C. Circuit issued its much-anticipated decision in Anthropic PBC v. U.S. Department of War, No. 26-1049, upholding the Department of War’s (“DOW”) exclusion of Anthropic’s Claude artificial intelligence (“AI”) models from its supply chain under the Federal Acquisition Supply Chain Security Act of 2018 (“FASCSA”), 41 U.S.C. § 4713. The ruling means the Government may continue its efforts to require contractors to cease the use of Anthropic as part of the performance of federal contracts. This post summarizes the decision and steps contractors should consider taking in response.

Background

As we covered in our prior blog post, the dispute between Anthropic and the federal government began with a contract disagreement over AI usage restrictions (Anthropic held a $200 million Pentagon contract and was the first frontier AI company to deploy models on classified government networks). Anthropic maintained two “red lines”: it refused to allow its Claude AI model to be used for mass domestic surveillance of Americans or in fully autonomous weapons systems. When the DOW demanded that Anthropic agree to “all lawful use” of its technology without these restrictions, Anthropic refused. On February 27, 2026, President Trump and Secretary of War Pete Hegseth announced on social media their intention to remove Anthropic from the federal supply chain.

On March 3, 2026, Secretary Hegseth issued a formal determination under FASCSA to take covered procurement actions against Anthropic, finding that the continued integration of Claude into DOW systems presented a “significant supply chain risk,” that removal was “necessary to protect national security,” and that no “less intrusive measures” were “reasonably available.” The Secretary also determined that an “urgent national security interest” required immediate action. The DOW’s Chief Information Officer then ordered removal of all Anthropic products from DOW systems within 180 days and prohibited contractors from using Anthropic products in DOW work.

Continue reading “D.C. Circuit Upholds the Anthropic Ban: What It Means for Federal Contractors”

Understanding the Potential Anthropic Ban: Key Considerations for Federal Contractors

Robyn N. Burrows and Merle M. DeLancey, Jr. ●

On February 27, 2026, President Trump posted on Truth Social directing all federal agencies to “immediately cease” use of Anthropic’s artificial intelligence (“AI”) technology. Simultaneously, Defense Secretary Pete Hegseth announced on X he was designating the company a “supply chain risk to national security” and prohibiting federal contractors from doing any business with Anthropic. This unprecedented action against a domestic company has significant supply chain implications for government contractors. Below, we summarize what led to this development, the legal authorities pertaining to supply chain bans, and practical guidance for contractors navigating this evolving situation.

1. Background: From Contract Dispute to Presidential Directive

The conflict between Anthropic and the federal government emerged from a contract dispute over the company’s AI usage restrictions. Anthropic, which holds a $200 million Pentagon contract and was the first frontier AI company to deploy its models on classified government networks, maintained two “red lines” in its contract negotiations: it refused to allow its AI model, Claude, to be used for mass domestic surveillance of Americans or in fully autonomous weapons systems.

The Pentagon demanded that Anthropic agree to “all lawful use” of its technology without Anthropic’s proposed restrictions. Anthropic’s refusal led President Trump and Secretary Hegseth to announce their decisions against Anthropic on social media. Secretary Hegseth stated that Anthropic would be “immediately” designated a supply chain risk, prohibiting any federal contractor working with the military from “any commercial activity with Anthropic.”

Anthropic has announced it will challenge the supply chain risk designation in court, calling it “legally unsound.”

Continue reading “Understanding the Potential Anthropic Ban: Key Considerations for Federal Contractors”
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