Federal Judge Says Pentagon’s Anthropic Blacklisting Was Unlawful

A federal judge in California has ruled that the Pentagon acted unlawfully when it designated Anthropic as a supply chain risk, a decision that effectively prevented the artificial intelligence company from working with the U.S. government.

In a ruling issued Thursday, U.S. District Judge Rita Lin found that the Defense Department’s actions amounted to unlawful retaliation against Anthropic in violation of the First Amendment. She also described Defense Secretary Pete Hegseth’s decision to blacklist the company as “arbitrary and capricious.”

Lin said the government provided only “slim” submissions in support of the designation. The court found that the Pentagon’s statements and conduct indicated the decision was driven by a desire to publicly punish Anthropic for what officials viewed as the company’s “arrogance” in criticizing the government.

The judge also pointed to an apparent inconsistency in the Pentagon’s position. Hegseth had previously threatened to invoke the Defense Production Act against Anthropic, a move that suggested the company was considered important to national security rather than a security threat.

Lin emphasized that the Defense Department remains free to choose which AI company it wants to use. However, she concluded that the broad restrictions imposed specifically on Anthropic were illegal and lacked a sufficient basis.

The decision represents a significant legal victory for Anthropic in its dispute with the Pentagon and the Trump administration. The company has also brought a separate lawsuit before a federal appellate court in Washington, D.C., challenging another rule the Defense Department is using to classify Anthropic as a supply chain risk. A decision in that case is still pending, and it remains unclear whether the Trump administration will appeal Lin’s ruling before that separate case is resolved.

The dispute began after Anthropic declined to accept terms sought by the Pentagon concerning how its Claude AI systems could be used. The company objected to potential applications involving fully autonomous weapons and domestic surveillance and maintained that its technology should retain safeguards against those uses.

In a February statement, Anthropic CEO Dario Amodei said the company “cannot in good conscience accede” to the Pentagon’s request to remove those safeguards and permit “any lawful use” of its AI systems. Amodei said Anthropic continued to support the U.S. military and intelligence community but argued that there were a “narrow set of cases” in which AI could undermine rather than protect democratic values.

Anthropic said its Defense Department contracts included two safeguards: one barring the use of its technology for “mass domestic surveillance” and another preventing its deployment in “fully autonomous weapons,” where human involvement is not required.

President Donald Trump also criticized Anthropic during the dispute, writing that his administration would “NEVER ALLOW A RADICAL LEFT, WOKE COMPANY TO DICTATE HOW OUR GREAT MILITARY FIGHTS AND WINS WARS.”

In March, the Pentagon formally notified Anthropic that it had been designated a supply chain risk. The company subsequently challenged the government’s actions in court.

Following Thursday’s ruling, Anthropic welcomed the decision and said it remained committed to working with the government on national security applications of artificial intelligence. The company said: “We remain focused on working productively with the government to harness A.I. for our national security so all Americans benefit from this technology.”