Anthropic files for IPO, hit with a US government appeal on the same day; Claude service bans have extended to business clients.

Beating AI Express: Local time October 26, the U.S. Department of Justice filed an appeal notice with the Ninth Circuit Court of Appeals, seeking to overturn a California court’s August ruling and reinstate the full federal agency ban on Anthropic. The same day, Anthropic publicly submitted its IPO prospectus. The case has two parallel tracks: In September, the Washington Court of Appeals already allowed the Pentagon to exclude Claude from military systems and related defense procurement citing "supply chain risks". However, the California court blocked a broader ban: it not only ordered all federal agencies to cease using Claude, but also prohibited defense contractors from engaging in non-military commercial partnerships with Anthropic. The judge ruled the government lacked sufficient basis to prove the relevant risks, and the ban was in fact retaliation for Anthropic’s public criticism of the government. Anthropic’s prospectus shows government agency contract revenue accounts for only around 1% of its total revenue, but the ban has impacted a larger commercial market. Evidence cited by the California court indicates three government contractors have terminated or been ordered to terminate their contracts with Anthropic. Separately, three deals totaling over $180 million that were near completion fell through. Some clients have requested to add unilateral termination clauses, while others have directly switched to competitors. Anthropic previously estimated to the court that if the broadest ban were fully implemented, its 2026 revenue could decline by billions of dollars.