[FLASH] DC Circuit upholds Pentagon 'supply-chain risk' label on Anthropic 2-1; mandate stayed pending rehearing
A D.C. Circuit panel (Katsas, joined by Rao) held the Defense Department had 'ample support' to treat Claude's encoded usage restrictions as a supply-chain risk under FASCSA; Henderson dissented that the statute targets foreign sabotage, not a US firm enforcing known limits on its own product. The panel withheld the mandate so Anthropic can seek panel or en banc rehearing; Anthropic says it is 'considering all options, including further review', the Pentagon says the ruling 'completely validates' its position. The parallel N.D. Cal. ruling (Judge Lin, August) that the designation was unlawful stands. Next dated steps: rehearing petition, any cert filing.