US Court Lets Pentagon Blacklist AI Firms Over Ethics Policies Under FASCSA

A federal appeals court ruled 2-1 that the Pentagon can designate Anthropic a supply chain risk under FASCSA because of ethics restrictions built into Claude. The decision requires no evidence of bad faith and no notice to Congress; Anthropic won a parallel case in California under a different statute.

• D.C. Circuit upheld the Pentagon's FASCSA designation of Anthropic
• 2-1 ruling calls Claude's ethics limits 'manipulation' of the product
• Dissent warns the precedent threatens every AI company
• Anthropic won a parallel case in San Francisco under 10 U.S.C. § 3252