D.C. Circuit Upholds Pentagon Exclusion of Anthropic’s Claude

Is Claude still excluded from Pentagon use?

Yes. The D.C. Circuit upheld the March 2026 procurement action directing Claude’s removal from Department systems and prohibiting contractors from using Anthropic products for Pentagon work.

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Why does the ruling matter for Anthropic?

It restricts Anthropic’s access to a major defense customer and contractor channel, limiting potential federal defense revenue and deployments while the exclusion remains in force.

Did Anthropic lose $200 million of guaranteed revenue?

No. The July 2025 award was a two-year prototype other transaction agreement with a $200 million ceiling, so $200 million was the maximum contract value rather than disclosed guaranteed revenue.

Why did the Pentagon exclude Claude?

The dispute centered on Anthropic’s refusal to accept an “all lawful uses” term while retaining restrictions on lethal autonomous warfare and mass surveillance of Americans. The D.C. Circuit held that Claude’s restrictions could qualify as a supply-chain risk under 41 U.S.C. § 4713.

Didn’t Anthropic already win a court ruling against the restriction?

Yes, but that case addressed a separate supply-chain designation under 10 U.S.C. § 3252. The D.C. Circuit said § 4713 has a broader definition, so the California ruling did not control this Pentagon procurement case.

What happens next?

Anthropic said it is considering further review. Unless rehearing or higher-court review changes the decision, the § 4713 exclusion remains in force.