Anthropic CEO Dario Amodei at the AI Impact Summit on Thursday, February 19, 2026 in New Delhi, India.
Ruhani Kaur | Bloomberg | Getty Images
A federal appeals court in Washington, D.C., is scheduled to hear arguments Tuesday in Anthropic’s lawsuit against the Pentagon’s blacklisting. The lawsuit is the latest in a months-long conflict between the Department of Defense and one of the nation’s leading artificial intelligence companies.
According to an order issued earlier this month, the U.S. Department of Justice and Anthropic on behalf of the Pentagon will each have 15 minutes to present their case to a panel of three circuit judges. Justices Karen Henderson, Gregory Katsas, and Neomi Rao will then be advised on the matter and will issue a written opinion.
Proceedings begin Tuesday at 9:30 a.m. Eastern Time.
Anthropic sued Secretary of Defense Pete Hegseth in March after he and the Pentagon declared the AI startup a supply chain risk, a threat to U.S. national security. This label has historically been reserved for foreign adversaries, requiring defense contractors to certify that they will not use Anthropic’s Claude models in their work with the military.
The designation came after months of tense negotiations between Anthropic and the Department of Defense broke down. The Pentagon wanted Anthropic to give the Pentagon unfettered access to its models for all lawful purposes, but Anthropic wanted assurances that its technology would not be used for fully autonomous weapons or domestic mass surveillance.
The two sides were unable to reach an agreement, and Hegseth blacklisted Anthropic and bashed the company on social media. Anthropic CEO Dario Amodei said the company had “no choice” but to challenge the supply chain risk designation in court.
The Pentagon continues to use Anthropic’s model to support military operations against Iran, and President Donald Trump told CNBC last month that a deal between the Pentagon and the startup was “possible.”
An appeals court denied Anthropic’s request to temporarily block the designation in April, meaning the designation remains in effect pending litigation. But the judges agreed to expedite the case because Anthropic “is likely to suffer irreparable harm” during the litigation, according to the order.
The government argued in briefs ahead of Tuesday’s hearing that Anthropic could “incorporate limitations” into its model that could pose an “intolerable national security risk.” According to the brief, Mr. Hegseth determined that Anthropic, in particular, would “undermine the substantial trust necessary to sustain the relationship” because the company could “manipulate the model to enforce its own moral and policy judgments about the military’s appropriate use of technology.”
Anthropic said in a separate briefing that the idea that limits could be encoded in future models is unsupported and there is “no basis” for the supply chain risk designation. The company also claims Hegseth and the Department of Defense violated the Constitution and existing procedures.
“The court should find this designation illegal,” Antropic’s lawyers wrote.
In addition to the lawsuit in Washington, D.C., Anthropic has filed a separate, related lawsuit in federal court in San Francisco. The Department of Defense relies on two different designations to justify its actions regarding supply chain risk, which means these designations must be litigated in two separate courts.
Anthropic was granted a preliminary injunction in the San Francisco lawsuit, allowing government agencies other than the Department of Defense to use Anthropic’s model while the lawsuit progresses.
“Applicable law provides no support for the Orwellian notion that U.S. companies that express disagreement with the government may be branded as potential adversaries and obstructionists of the United States,” the judge wrote.
WATCH: Anthropic considers $50 billion raise at nearly $900 billion valuation: Report
