A federal appeals court in Washington, D.C., on Friday upheld the U.S. Department of Defense’s decision to place the artificial intelligence startup Anthropic on a federal blacklist, barring the company from receiving military contracts. The ruling supports moves made under the administration of former President Donald Trump and then-War Secretary Pete Hegseth, who raised concerns about the safety protocols of Anthropic’s AI technology.

Anthropic had challenged the March designation, which classified the company as a national security supply chain risk. The startup argued against the blacklisting, asserting that its technology met adequate safety standards. The legal dispute centers on the Pentagon’s authority to restrict defense contracts for companies perceived as potential security threats, particularly in the rapidly evolving field of artificial intelligence.

The U.S. Court of Appeals' decision effectively maintains the Department of Defense’s position that Anthropic's technology could pose risks to national security. Details of the court's opinion were not immediately released, but the ruling signifies continued scrutiny of AI companies engaged in defense-related work amid broader concerns over the ethical and safety implications of emerging technologies.

Anthropic has indicated it is reviewing its legal options following the court’s judgment. The case illustrates the growing tension between government agencies seeking to ensure national security and private sector innovators developing advanced AI systems. As artificial intelligence becomes increasingly integrated into defense applications, regulatory and legal frameworks are being tested to balance innovation with risk mitigation.