Federal judge overturns Pentagon's supply-chain risk designation of AI firm Anthropic

A U.S. district judge in California has nullified the Pentagon’s decision to label AI developer Anthropic as a supply-chain risk, finding the action unconstitutional. Judge Rita Lin said the Department of Defense’s move infringed the First Amendment and the Fifth Amendment’s due-process clause, and she ordered the agency to withdraw all related guidance and directives.

Lin wrote that the government’s justification – that Anthropic’s public criticism of the administration’s AI policy made it untrustworthy – does not meet legal standards for imposing such penalties. The ruling removes a restriction that had barred defense contractors from using Anthropic’s Claude models in work for the military.

Anthropic, which is preparing for an initial public offering, welcomed the decision, stating that it remains committed to collaborating with the government on AI applications that benefit national security.

The company is also pursuing a separate lawsuit in Washington, D.C., challenging the same designation, which will be heard in a different court.