I don't think they can, at least if they are making an argument for why the Defense Production Act should not apply to them. Their original argument is that they will not help with anything that is unconstitutional, such as the unlawful spying on American citizens, without a warrant.
I don’t think Defense Production Act lets the government takeover what you produce, just that if you sell something you have to prioritize selling to the Feds. There is also precedent that code is speech and the government cannot compel speech (this came up during the debacle where FBI wanted a backdoor to unlock iPhones and Apple said no, we’re not building that)