U.S. Judge Declares Pentagon's Anthropic Supply-Chain Risk Designation Unlawful

A federal judge on Thursday found that the Trump administration's February sanctions against artificial-intelligence company Anthropic were illegal, concluding that the government had punished the firm for publicly criticizing the Pentagon. Judge Rita Lin, in a 59-page opinion, said the “empty invocation of national security is not a blank check to punish and retaliate against government critics.”

The ruling blocks the Department of Defense and other agencies from enforcing the order that barred military use of Anthropic’s Claude AI models and overturns Defense Secretary Pete Hegseth’s designation of the company as a “supply chain risk,” a label previously applied only to foreign firms. The decision makes permanent a temporary suspension of the sanctions that the judge had issued in March and takes effect immediately, though the government may appeal.

“We welcome the court’s ruling that this supply chain risk designation was unlawful,” an Anthropic spokesperson said.

Hegseth’s action followed Anthropic’s refusal to allow the military to use Claude for surveillance or autonomous weapons, a stance the company says could cost it billions in lost contracts and reputational damage. The Pentagon argued that private firms should not be able to limit military applications of their technology.

Anthropic’s lawsuit, filed on March 9, alleged that the designation violated its First-Amendment free-speech rights and its Fifth-Amendment due-process rights because the company was not given an opportunity to contest the label. The Justice Department countered that the restriction was based on contractual disagreements, not on the firm’s safety concerns.

Judge Lin, a Biden-appointed judge, described the Pentagon’s designation as “illegal and baseless.” Anthropic is also pursuing a separate lawsuit in Washington, D.C., challenging another Pentagon supply-chain risk designation that could affect its eligibility for civilian government contracts.