D.C. Circuit Upholds Pentagon Exclusion of Anthropic From Defense Work

Is Anthropic still barred from Pentagon work?

Yes. The D.C. Circuit upheld the March 3 procurement action under 41 U.S.C. § 4713, which permits the Pentagon to exclude Anthropic from covered contracts and subcontracts.

Orbitrum Investor Impact

Does the ruling restore the broader ban on all federal and defense-contractor business?

No. The D.C. Circuit said the California case involved a different statute, and the California court separately vacated the government-wide restrictions and the order barring defense contractors from unrelated commercial activity with Anthropic.

Why does the ruling matter for Anthropic investors?

It preserves a barrier to defense revenue and deployment because Pentagon agencies and contractors cannot use Claude for department work. The effect is narrower than a government-wide ban.

How much Pentagon business was potentially at stake?

Anthropic had a two-year Pentagon prototype agreement worth up to $200 million. That ceiling was not guaranteed revenue.

Why did the court side with the Pentagon?

The majority held that Anthropic’s ability to encode restrictions into Claude could qualify as a supply-chain risk under the broader federal procurement statute even without malicious intent. Judge Karen LeCraft Henderson dissented.

What happens next?

Anthropic said it is considering further review of the D.C. Circuit decision, while the separate California judgment remains on a different legal track.