By Rajwa Quasim
Anthropic has scored a major legal victory against the Trump administration after a federal judge in California ruled that the Pentagon’s decision to label the AI company a “supply chain risk” violated the law and ordered the designation removed.
U.S. District Judge Rita Lin said that while the military should have the choice to decide which companies it works with, the Pentagon’s action against Anthropic was unlawful retaliation that violated the First Amendment. The judge also pointed out that the company was not given the due process required under the Fifth Amendment before the decision was made.
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The dispute between the Pentagon and the Claude maker traces back to February, when they failed to reach an agreement regarding the use of Claude, the company’s AI model. Anthropic had sought limits on the use of its technology for fully autonomous weapons and mass surveillance of Americans and refused to remove internal safety guardrails. However, the Pentagon denied the claim of unlawful use and said Anthropic could not try to control the military’s use of the models it bought and paid for.
She noted that “The empty invocation of national security is not a blank check to punish and retaliate against government critics. The evidence shows the Pentagon wanted 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.”
As the negotiations failed to produce an agreement, Defense Secretary Pete Hegseth designated Anthropic as a supply chain risk. This barred the Pentagon and its contractors from working with Anthropic. The label has traditionally been reserved for companies considered linked to foreign adversaries. However, Anthropic challenged the decision in court in March, arguing that the government had acted unlawfully.
Anthropic welcomed the ruling. The company’s spokesperson said, “We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology.”
Judge Lin was skeptical of the Pentagon’s stated reason. She noted that other parts of the government continued working with Anthropic despite the Pentagon’s concerns, writing that “None of that is consistent with a genuine fear that Anthropic is a saboteur who would poison its software to harm national security.”
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She further pointed to Hegseth’s proposal to apply the Defense Production Act to Anthropic, “which would mean the company was essential to national security rather than a threat to it.”
In the backdrop, President Trump told Axios in an interview that he had previously viewed Anthropic as a national security threat, but he no longer believed that was true.
Anthropic filed two separate complaints against the Department of Defense in March, one in California and the other in Washington, D.C., which is still ongoing.