Federal Judge Overturns Pentagon's Blacklist of Anthropic for Retaliation

A federal judge has voided the Pentagon’s designation of Anthropic as a national security supply-chain risk, determining that the label was a form of punishment for the company's public criticism of the Trump administration rather than a legitimate security assessment. US District Judge Rita Lin, from the Northern District of California, issued this decision in a comprehensive 59-page order on Thursday.

In her ruling, Lin emphasized that the invocation of national security cannot be used as a justification for punishing government critics. She noted that the actions taken against Anthropic violated both the First Amendment and the Fifth Amendment’s due process clause, mandating the government to withdraw the directives it had issued against the company.

The conflict began on February 27, when President Donald Trump ordered federal agencies to cease using Anthropic’s technology. On the same day, Defense Secretary Pete Hegseth labeled the company a supply-chain risk. This designation was reportedly triggered by Anthropic’s refusal to remove two contractual restrictions concerning its technology: prohibiting mass surveillance of Americans and banning fully autonomous weapons.

Anthropic filed a lawsuit in March, claiming that the designation was unlawful retaliation. Lin granted a preliminary injunction later that month on First Amendment grounds. Despite this, the Pentagon's chief technology officer maintained that the ban would remain in effect, leading to the current legal proceedings.

The judge's order addressed cross-motions for summary judgment that were heard on July 30, during which Lin expressed skepticism about the government's justification for its actions. She remarked that the evidence presented by the government did not adequately support its position and, in fact, seemed to worsen the case against it.

Lin's ruling further concluded that the measures taken against Anthropic were motivated by a desire to make an example of the company for its perceived arrogance. She pointed out the contradiction in the military's attempts to collaborate with Anthropic while simultaneously labeling it a security risk.

The Justice Department contended that the designation stemmed from a contractual disagreement rather than Anthropic’s public statements, arguing that the company’s usage restrictions created operational uncertainties for the military. The government has indicated plans to appeal the ruling.

An Anthropic spokesperson stated that the company is committed to working productively with the government to leverage AI for national security purposes. Additionally, Anthropic is challenging another designation related to civilian government contracts in Washington, DC, where a different appeals court had previously declined to grant emergency relief.

This ongoing legal battle raises important questions about the extent to which a government can penalize a technology provider over its safety terms, a matter that may have implications for European buyers observing the situation. As of now, Lin has not set a date for further proceedings, and the government has not disclosed when it will file its appeal.