Court Upholds Pentagon Exclusion of Anthropic as IPO Terms Remain Unset
A 2-1 ruling preserves the Pentagon-specific restriction while Anthropic’s possible IPO remains preliminary, with no offering price or confirmed timing.
The U.S. Court of Appeals for the D.C. Circuit upheld the Pentagon’s decision to exclude Anthropic from its supply chain, preserving restrictions on Claude as the company weighs a possible public offering with no finalized terms.
A two-judge majority ruled 2-1 on Sept. 25 that the Pentagon could remove Anthropic under the Federal Acquisition Supply Chain Security Act of 2018. The decision allows the Department of War to bar Claude from its systems and prevent contractors from using Anthropic products for Pentagon work.
The ruling applies only to the Pentagon-specific exclusion. It does not create a government-wide ban on Anthropic. A separate Aug. 27 decision by the Northern District of California rejected broader government measures affecting federal agencies and defense contractors outside Pentagon work.
The dispute followed Anthropic’s refusal to authorize Claude for “all lawful uses,” including lethal autonomous warfare and mass domestic surveillance. Judge Gregory Katsas, writing for the majority, said the Pentagon had “ample support for its conclusion” that continued use of Claude in its information systems presented a national-security risk covered by the law.
Anthropic received a two-year Pentagon prototype agreement in July 2025 with a ceiling of $200 million. The ceiling set the maximum value of the agreement and does not establish that Anthropic received $200 million in payments.
Anthropic’s possible IPO has been discussed at a valuation near $2 trillion, with a potential fundraising target of as much as $100 billion. Those figures remain preliminary expectations. No offering price has been set, and the timing of a possible November IPO remains unconfirmed.
Nvidia is also considering a potential investment of up to $10 billion as an anchor investor, but that transaction has not been finalized. Anthropic remains a private company.
In July 2025, Thiyagu Ramasamy, Anthropic’s head of public sector, said the company looked forward to “deepening our collaboration across the Department.”
