The Trump administration can blacklist AI firm Anthropic from all Pentagon contracts, a federal appeals court ruled Friday, in a decision that expands the executive branch’s authority to designate US businesses as national security risks.

The D.C. Circuit Court of Appeals ruled 2-1 that the Defense Department had good reason to conclude that the company’s artificial intelligence products pose a supply chain risk to the department and its contractors because the company includes code in its models that restricts them from performing certain tasks. Anthropic has said that it will not allow its products to be used for autonomous weapons or mass…