A federal appeals court panel in Washington, D.C., on Friday upheld the Pentagon's blacklisting of Anthropic, dealing a blow to the artificial intelligence company in its months-long battle with the Trump administration. The 2-1 decision rejected Anthropic's argument that the Department of Defense's ban on its Claude models was arbitrary, unauthorized and unconstitutional.

"The Department had ample support for its conclusion that the continued integration of Claude into the Department's information systems, by the Department or its contractors, presented a statutorily covered national-security risk," Judge Gregory Katsas wrote in the majority opinion for the U.S. Court of Appeals for the District of Columbia, which Judge Neomi Rao joined. Katsas and Rao were appointed by President Donald Trump. Judge Karen Le Craft Henderson, who was appointed by former President George H.W. Bush, dissented.

In March, the DOD labeled Anthropic a supply chain risk, meaning the company purportedly threatened U.S. national security, after negotiations about how the military could use its Claude AI models spiraled out of control. The designation prevents the U.S. military from using Anthropic's models and blocks defense contractors from using them in their work with the agency. Anthropic's relationship with the Trump administration has been fraught ever since, and Trump has repeatedly slammed company's CEO Dario Amodei on social media.

"We respectfully disagree with the court's decision," an Anthropic spokesperson told CNBC in a statement. "Another federal court has already held the government's parallel designation unlawful. We remain confident in our position and are considering all options, including further review." The appellate panel said it would delay the decision from taking immediate effect to give Anthropic time to petition for a rehearing or seek an en banc rehearing, or ask the Supreme Court to take the case.