Judge rules Pentagon’s supply chain risk designation for Anthropic was illegal

A federal judge in California ruled on Thursday the Pentagon’s blacklisting of the artificial intelligence firm Anthropic earlier this year was illegal, violating the First Amendment.

In a ruling Thursday evening, Judge Rita Lin said the Trump administration retaliated against the Claude-maker for its “constitutionally protected activity,” and violated the Due Process clause of the Fifth Amendment

“Though the Department of War is undisputedly free to select the AI vendor of its choice, the evidence demonstrates that the broad measures imposed on Anthropic were illegal and baseless,” Lin wrote in the 59-page ruling.

Anthropic sued the Trump administration last March, challenging the Pentagon’s decision to label the company a supply chain risk after negotiations fell apart over safety guardrails.

Anthropic demanded its technology to not be used in fully autonomous lethal weapons or for the mass surveillance of Americans, while the Pentagon insisted it be allowed to use Anthropic’s Claude for “all lawful uses.”

In doing so, Pentagon leadership directed offices to cease using Anthropic’s products. Announcing the designation at the time, Defense Secretary Pete Hegseth said “America’s warfighters will never be held hostage by the ideological whims of Big Tech.”

The AI firm argued in court the Pentagon retaliated against the company over what it believes is a “protected viewpoint” of the company.

Lin agreed, stating Anthropic CEO Dario Amodei was “consistent with a longstanding practice of public speech on AI safety,” when he publicly debated the safety restrictions required for Claude.

The Department of Justice (DOJ) argued speech used within contract negotiations is not protected, but Lin said that position is “unsupported.”

“Defendants claim that because of Anthropic’s ‘increasingly hostile manner through the press’ and its criticism of the Department of War’s views on AI use, defendants ‘cannot trust Anthropic to ensure the integrity of its models,'” Lin wrote.

“Neither the Constitution nor the federal statute invoked by defendants allows them to impose sweeping penalties based principally on Anthropic’s critique of the Administration’s views,” the judge continued.

A spokesperson for Anthropic said the company “welcomed” the ruling.

“We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology,” the spokesperson added.

The DOJ nor Department of Defense immediately responded to request for comment.

While the ruling wraps up Anthropic’s suit in northern California, the company also filed suit over the Trump administration’s actions in Washington, D.C.

A three-judge panel in the D.C. Circuit Court of Appeals heard from both sides in May but have not released a decision.