Judge Overturns Trump's Ban on Anthropic

A federal judge has dealt a significant blow to the Trump administration, ruling that its actions against Anthropic were unlawful. Judge Rita Lin made this decision in a 59-page order.

The court granted summary judgment to Anthropic in claims related to the First Amendment and due process under the Administrative Procedure Act. This means Anthropic wins on these points without needing further trial or evidence.

This dispute began when the Pentagon asked Anthropic to remove restrictions from its Claude LLM, used for tasks like mass surveillance of Americans and lethal autonomous warfare. However, instead of complying with all demands, Anthropic drew a line at two specific uses: mass surveillance and lethal autonomous warfare.

The Trump administration responded by banning every federal agency from using Anthropic’s technology, labeling the company ‘a RADICAL LEFT, WOKE COMPANY’ on Truth Social. Hegseth even accused Anthropic of arrogance and betrayal in a tweet, going so far as to bar any military contractor from doing business with it.

Initially, the government claimed that Anthropic posed a risk due to its alleged backdoor access to deployed models. But they later conceded this was not true – Anthropic has no such access, and Claude is not inherently more risky than other ‘black box’ systems.

Despite conceding on the risk claim, the government argued that trust had been forfeited by Anthropic’s public statements through the press. However, Judge Lin looked at events differently: she noted a timeline of suspicious interactions leading up to the ban.

Days before blacklisting Claude, Hegseth floated invoking the Defense Production Act, which would have made Anthropic essential to national security. And just one day after designating it ‘high-risk,’ an under secretary sent an email saying that a contract was ‘very close.’ This contradicts claims of severed ties and lack of engagement.

Judge Lin found the actions not only retaliatory but also arbitrary and capricious under the Fifth Amendment. She deemed them void from the start because they lacked pre-deprivation process required by law, meaning no proper hearing or review occurred before imposing penalties.

As a result of these findings, Judge Lin vacated the designation and Hegseth’s boycott order. The court also granted a permanent injunction to prevent similar measures in the future and denied the government’s request for an administrative stay – allowing Anthropic to continue business as usual.

In addition, Judge Lin entered judgment in favor of agencies that took no action against Anthropic. This decision is seen as a major victory for Anthropic, which estimates its revenue will take a hit: between 50% and 100% from defense-related sales this year due to the ban.