A federal appeals court in Washington, D.C. upheld the Pentagon's designation of Anthropic as a supply chain risk, rejecting the AI company's challenge to the Defense Department's ban on its Claude models. The 2-1 decision sided with the DOD's national-security concerns, though a San Francisco court previously ruled one of the parallel designations unlawful. Anthropic is considering further legal appeals, including petitions for rehearing and potential Supreme Court review.