Federal Judge Finds Pentagon’s Actions Against Anthropic Unlawful
A U.S. federal judge has ruled in favor of artificial intelligence company Anthropic in its legal battle against the Pentagon, finding that the government’s sanctions against the firm were illegal. The decision, issued Thursday night by U.S. District Judge Rita Lin, vacates the Pentagon’s “supply-chain risk” designation of Anthropic and orders the Department of Defense to revoke all related guidance, directives, communications, or instructions.
Judge Lin, an appointee of former President Joe Biden, wrote in a 59-page ruling that the government’s actions violated the due process clause of the Fifth Amendment. She said the measures were “based on a desire to make a public example out of Anthropic for its ‘arrogance’ in criticizing the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model.” In a separate quote cited by the news agency AFP, she added: “The empty invocation of national security is not a blank check to punish and retaliate against government critics.”
The ruling makes permanent a temporary suspension of sanctions that Lin had ordered in March. It also blocks enforcement of President Donald Trump’s order directing federal agencies to stop using Anthropic’s tools, including its Claude AI models.
Background of the Dispute
The conflict began in February, when President Trump and Defense Secretary Pete Hegseth accused Anthropic of endangering national security and designated the company a supply-chain risk—a status typically reserved for foreign firms. The move followed Anthropic’s refusal to allow the military to use its AI chatbot Claude for U.S. surveillance or autonomous weapons. Anthropic CEO Dario Amodei declined to back down over concerns that the company’s products could be used for mass surveillance or autonomous armed drones.
The Pentagon’s designation blocked Anthropic from certain military contracts. Anthropic executives said the move could cost the company billions of dollars in lost business and reputational harm. The company also alleged that Hegseth overstepped his authority with the ban.
Anthropic maintains that AI models are not reliable enough to be safely used in autonomous weapons and that it opposes domestic surveillance as a violation of rights. The Pentagon, however, argued that private companies should not be able to constrain military action.
Reactions and Next Steps
An Anthropic spokesperson welcomed the ruling, saying in a statement: “We welcome the court’s ruling that this supply chain risk designation was unlawful. We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology.”
The White House did not immediately respond to a request for comment. The government is expected to appeal the decision.
In addition to this case, Anthropic has filed a separate and narrower lawsuit pending in the federal appeals court in Washington, D.C., over a different rule the Pentagon is using to designate the company a supply-chain risk. That case could also affect Anthropic’s ability to secure civilian government contracts.
Anthropic’s designation marked the first time a U.S. company has been publicly designated a supply-chain risk under an obscure government-procurement statute aimed at protecting military systems from foreign sabotage.
Earlier in the proceedings, Lin had temporarily blocked the Pentagon from labeling Anthropic and blocked enforcement of Trump’s social media directive. In a July 30 hearing, she described the government’s position as “really troubling” and “at odds” with the First Amendment, adding that the record had “gotten worse for the government.”
Department of Justice lawyers had argued that AI models are “so staggeringly enormous and opaque” that they cannot be evaluated like physical hardware. Anthropic’s lawyer, Michael Mongan, said the government’s actions “profoundly harm Anthropic” and “threaten more broadly to chill speech and debate.”
The ruling has drawn attention as Anthropic and OpenAI each prepare for initial public offerings.