The D.C. Circuit Court of Appeals has rejected Anthropic's request to lift the Defense Department's designation that the artificial intelligence startup is a supply-chain risk.

The court made the ruling Wednesday, leaving in place the designation while courts consider the merits of a challenge to it, according to Politico. 

In February, Anthropic told Defense Secretary Pete Hegseth that it wouldn't allow the Pentagon to use the company's Claude AI technology for autonomous weapons or large-scale surveillance of U.S. citizens. Hegseth and Trump subsequently labeled Anthropic a supply-chain risk. 

Anthropic argued in its request that it was losing money and taking a hit to its reputation as a result of the designation.