SAN FRANCISCO — Federal attorneys have filed an appeal challenging a court decision that prevented the Pentagon from imposing penalties on artificial intelligence company Anthropic following a contract disagreement over military AI applications.
Justice Department lawyers submitted their appeal notice Thursday in San Francisco federal court, seeking to overturn U.S. District Judge Rita Lin’s ruling from the previous week.
Judge Lin’s decision prevented the Defense Department from designating Anthropic as a supply chain threat and stopped implementation of President Trump’s social media order directing federal agencies to cease using the company’s Claude chatbot system.
The judge criticized what she called “broad punitive measures” implemented by the Trump administration and Defense Secretary Pete Hegseth, describing them as seemingly arbitrary and potentially devastating to Anthropic’s business. She particularly questioned Hegseth’s use of unusual military powers typically reserved for foreign enemies.
“Nothing in the governing statute supports the Orwellian notion that an American company may be branded a potential adversary and saboteur of the U.S. for expressing disagreement with the government,” Lin wrote.
Pentagon leadership strongly criticized the ruling, with U.S. Defense Undersecretary Emil Michael, who serves as the Pentagon’s top technology official, calling Lin’s decision a “disgrace” on social media. He argued it would interfere with Hegseth’s “full ability to conduct military operations with the partners it chooses.”
Lin delayed implementation of her ruling for one week, providing the Pentagon time to file their appeal with the Ninth Circuit Court of Appeals. She clarified that her order doesn’t force the Pentagon to purchase Anthropic’s services or prevent switching to alternative AI providers.
The AI company has simultaneously pursued a separate, more focused legal challenge in the federal appeals court in Washington, D.C., targeting a different Pentagon regulation aimed at labeling Anthropic a supply chain threat.
The conflict between Trump, Hegseth, and Anthropic became public on February 27th following failed contract negotiations. The breakdown occurred when the company insisted on restrictions preventing its AI technology from being used in fully autonomous weapons systems or for surveilling American citizens. Pentagon officials maintained they should have unrestricted use of Claude for any lawful military purpose.
Multiple organizations filed court documents supporting Anthropic’s position, including Microsoft, various industry associations, technology workers, former military commanders, and a coalition of Catholic theologians.
