Anthropic “has not satisfied the stringent requirements” to temporarily lose the supply-chain-risk designation imposed by the Pentagon, a US appeals court in Washington, DC, ruled on Wednesday. The decision is at odds with one issued last month by a lower court judge in San Francisco, and it wasn’t immediately clear how the conflicting preliminary judgments would be resolved. The government sanctioned Anthropic under two different supply-chain laws with similar effects, and the San Francisco and Washington, DC, courts are each ruling on only one of them. Anthropic has said it is the first US company to be designated under the two laws, which are typically used to punish foreign businesses that pose a risk to national security. “Granting a stay would force the United States military to prolong its dealings with an unwanted vendor of critical AI services in the middle of a significant ongoing military conflict,” the three-judge appellate panel wrote on Wednesday in what they described as an unprecedented case. The panel said that while Anthropic may suffer financial harm from the ongoing designation, they did not want to risk “a substantial judicial imposition on military operations” or “lightly override” the military’s judgments on national security. The San Francisco judge had found that the Department of Defense likely acted in bad faith against Anthropic, driven by frustration over the AI company’s proposed limits on how its technology could be used and its public criticism of those restrictions. The judge ordered the supply-chain risk label removed last week, and the Trump administration complied by restoring access to Anthropic AI tools inside the Pentagon and throughout the rest of the federal government. Anthropic spokesperson Danielle Cohen says the company is grateful the Washington, DC, court “recognized these issues need to be resolved quickly” and remains confident “the courts will ultimately agree that these supply chain designations were unlawful.”