Artificial Intelligence & Machine Learning
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Litigation
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Next-Generation Technologies & Secure Development
Pentagon Appeal and Separate DC Case Keep Claude Contracting Risks Unsettled
Emilia David •
September 1, 2026
Image: Shutterstock/ISMG
Anthropic may have won a victory in its lawsuits against the U.S. Department of Defense, but the company and its federal contractor customers may still have to wait before they can resume jumping into new deals.
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A San Francisco federal court ruled on Aug. 27 that the Pentagon must remove the supply-chain designation label it tagged on Anthropic because the government acted unlawfully (see: Judge Orders Pentagon to Reverse Anthropic Blacklisting).
The decision, from the U.S. District Court for the District of Northern California Judge Rita F. Lin, will hardly be the last word on the matte, especially because government is almost certain to appeal and litigation is still ongoing in a second, related case in the United States Court of Appeals for the District of Columbia Circuit.
Kathleen Farley, vice president of litigation at industry association Chamber for Progress, told ISMG that some contractors should feel “some level of comfort” in the Lin decision, but only if they do not use certain contract clauses.
The case still pending at the Washington, D.C. circuit court challenges legal rationale for the Pentagon’s blacklisting made by invoking the Federal Acquisition Supply Chain Security Act, while the lawsuit decided in Lin’s courtroom challenged the blacklisting on Constitutional and administrative grounds.
“The takeaway is that if their contract has specific wording around” the Federal Acquisition Supply Chain Security Act, then “they have to wait for the D.C. decision to come down,” Farley said.
A three judge panel at the D.C. court of appeal declined to grant Anthropic’s request for an injunction barring the Pentagon from enforcing the blacklisting. The panel heard oral argument in May and has yet to rule.
Farley added that the Trump administration is likely to pursue litigation against Anthropic all the way to the Supreme Court.
Chris Mohr, president of the Software Information Industry Association, said federal civilian subcontractors shouldn’t be worried about using Anthropic products. Companies that do work for the Defense Department, are in a legal grey zone.
“In our conversations with companies, they are wary about using Anthropic because many of them were already using it and it hampered how they wanted to use it,” said Institute for Security and Technology CEO Philip Reiner.
He added that some companies were also confused about whether they were allowed to use other Anthropic models such as Mythos 5 or Fable 5 because it seemed like the Trump administration is interested in using them, too.
But all experts interviewed by ISMG agreed that the Trump administration seems ready to continue the fight against Anthropic.
“My advice is not to miss the chance to work with a company like Anthropic, but make sure you add an exit clause, and you don’t go in blind in case things change,” Reiner said.