Anthropic Seeks Full-Court Rehearing in Pentagon Blacklist Case

Anthropic on October 13, 2026 asked the full D.C. Circuit to rehear its challenge after a September 25 panel upheld 2-1 the Pentagon's March 2026 supply-chain risk designation under Section 4713 of the Federal Acquisition Supply Chain Security Act. Judge Gregory Katsas wrote the majority; Judge Karen LeCraft Henderson dissented. The designation bars defense contractors from using Anthropic models in department work. The court delayed the ruling's effect so Anthropic could seek rehearing. Anthropic signed a $200 million Pentagon contract in July 2025; GenAI.mil talks begun in September 2025 ended without agreement. CONTESTED: Anthropic says the move retaliated for its AI-safety stance and refusal to allow Claude for mass surveillance of Americans or lethal autonomous weapons. The majority said the Pentagon acted because Anthropic would not accept a contract term permitting use for all lawful purposes, and rejected claims the designation was arbitrary, unauthorized, and unconstitutional. A San Francisco judge last month in Anthropic PBC v. US Department of War found a parallel designation unlawful retaliation; the D.C. Circuit did not disturb it. En banc rehearing is discretionary and rarely granted; beyond that is a discretionary Supreme Court appeal. Pentagon Undersecretary Emil Michael welcomed the September ruling on X. Anthropic's IPO prospectus showed $4.6 billion in revenue against a $42 billion loss, mostly non-cash.