A federal ‌appeals ​court on Friday declined to block a Defense Department order blacklisting Anthropic from military ⁠contracts and deeming the ⁠AI startup a national security risk.

The ruling from the US Court of ⁠Appeals for the District of Columbia Circuit ⁠came in a lawsuit by Anthropic challenging its designation by the Pentagon as a national security supply ​chain risk, ‌which the startup says has ⁠cost it ​billions ⁠of dollars ⁠in lost business and damaged its reputation ahead ⁠of a highly anticipated initial ‌public offering.

Anthropic said in a statement that it respectfully disagrees with the decision but remains confident in its position and is considering its options, including further judicial review.

A federal judge in San Francisco last month struck down a parallel designation under a different law, finding the administration had unlawfully retaliated against Anthropic for its views on AI safety.

This is a developing story. Please check back for updates.

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