Anthropic loses Pentagon appeal as $2tn IPO nears
A US appeals court upheld Anthropic's Pentagon supply chain risk designation on Sept. 25, a setback ahead of a reported November IPO that investors expect to value the AI firm near $2 trillion.
Key points
- A federal appeals court ruled 2-1 on Sept. 25 to uphold the Pentagon's supply chain risk designation for Anthropic.
- The ruling lets the Pentagon exclude Anthropic from its systems and bar contractors from using its products for defence work.
- Anthropic held a two-year prototype agreement worth up to $200 million, awarded in July 2025, which was a ceiling rather than a confirmed payment.
- A California judge blocked broader restrictions on Aug. 27; Anthropic said those measures could cut some Pentagon-related revenue by 50% to 100%.
- Anthropic is reportedly targeting a November IPO, with Nvidia having considered an anchor investment of up to $10 billion.
A federal appeals court on Sept. 25 upheld the Pentagon's supply chain risk designation for Anthropic, rejecting the AI company's challenge in a 2-1 ruling. The decision allows the department to exclude Anthropic from its systems and to bar contractors from using its products for Pentagon work, according to Bitcoin.com News. The ruling lands ahead of a reported November initial public offering for the Claude maker.
Anthropic entered the dispute with a two-year prototype agreement worth up to $200 million, awarded in July 2025. That figure was a ceiling rather than an amount confirmed as paid. The confrontation grew from the Pentagon's demand to use Claude for all lawful purposes, while Anthropic refused to remove limits on lethal autonomous warfare and mass domestic surveillance. The appeals court accepted the Pentagon's concern that those restrictions could stop Claude performing requested tasks. Anthropic has also cited reputational harm from the supply chain risk designation.
The potential financial exposure reaches beyond the $200 million agreement, but the larger estimate is conditional. In a separate case, Anthropic estimated that reinstating broader government restrictions would cut its defence contractor and other Pentagon-related revenue by 50% to 100%. It said that would reduce total 2026 revenue by multiple billions of dollars. A California judge blocked those broader measures in an Aug. 27 order, and the projected billions are not a verified loss already incurred.
Court backs Pentagon exclusion
The California decision on the wider restrictions remains separate from the appeals ruling. The two cases concern different government actions and statutory powers. The California order does not require the Pentagon to use Claude, and the appeals decision does not establish a government-wide ban.
Investors now face a specific question about how much future government-related business Anthropic can retain under the narrower exclusion and the separate California order. Anthropic is reportedly aiming for a November IPO, later than the October debut many investors expected. Prospective buyers have anticipated a valuation of about $2 trillion and an offering that could raise up to $100 billion.
Anthropic is discussing the IPO with prospective investors, while Nvidia has considered an anchor investment of up to $10 billion, according to the report. Those talks were preliminary. No offering price has been set, and the court ruling has not established a reduction in the reported $2 trillion expectation. The company's financial disclosures and investor demand will determine whether that valuation holds.
Conditional revenue exposure
Some crypto traders have placed bets tied to Anthropic's prospective value through pre-IPO perpetual contracts, which have implied valuations around $2 trillion. Those contracts do not represent Anthropic shares, and their figures depend partly on assumed share counts. Perpetual futures are derivatives that confer no ownership or shareholder rights, so their market price reflects traders' expectations rather than the terms of any eventual stock offering.