A federal appeals court has ruled against Anthropic's request to temporarily block the Trump administration from labeling the company as a "supply chain risk" before the case goes to trial, but recommended that the case be expedited because of the risk of "irreparable harm" to the artificial intelligence technology provider.

According to CNBC, the three-judge appeals court panel in Washington, D.C. decided that Anthropic had not satisfied the stringent requirements needed to temporarily shed the supply chain risk designation, which bans the company from holding any contracts with the Department of Defense. However, with a separate federal court ruling in favor of Anthropic in March, the company will still be allowed to continue working with other government agencies while the case plays out.

"In our view, the equitable balance here cuts in favor of the government," the D.C. panel said in its April 8 ruling against Anthropic. "On one side is a relatively contained risk of financial harm to a single private company. On the other side is judicial management of how, and through whom, the Department of War secures vital AI technology during an active military conflict. For that reason, we deny Anthropic’s motion for a stay pending review on the merits."

The panel did however agreed with Anthropic's claim that it will "likely suffer some irreparable harm" as long as it carries the supply chain risk label, and acknowledged that the case should be expedited. "[B]ecause Anthropic raises substantial challenges to the determination and will likely suffer some irreparable harm during the pendency of this litigation, we agree with Anthropic that substantial expedition is warranted,” said the April 8 judgement.

Two of the judges on the panel were appointed by President Donald Trump, and have sided with the White House on national security cases in the past. That includes an August 2025 decision where they threw out a lower court ruling that would have held the Trump administration in contempt for sending 130 Venezuelans to an El Salvador prison.

In a statement issued after the appeals court ruling, Anthropic said that it was "grateful the court recognized these issues need to be resolved quickly," and that it's confident in its case moving forward. The company was first tagged with the supply chain risk designation in early March, after a $200 million deal with the federal government fell apart when the DOD demanded unrestricted access to Anthropic's AI systems.