Pentagon's Blacklisting of Anthropic Ruled Unlawful by US Judge

A federal judge has ruled that the Pentagon’s sanctions against AI company Anthropic were unlawful, finding that the government had punished the firm for publicly criticizing its views on AI safety. The ruling makes permanent a temporary suspension of sanctions ordered in March and takes effect immediately.

The decision was made by US District Judge Rita Lin, who described the Pentagon’s designation as ‘illegal and baseless’. This marks a significant blow to the Trump administration’s efforts to restrict Anthropic’s business dealings with the military.

Anthropic had been designated a ‘supply chain risk’ under an obscure government-procurement statute aimed at protecting military systems from foreign sabotage. However, this was the first time a US company has been publicly given such a designation, and it followed Anthropic’s refusal to allow its AI chatbot Claude to be used for US surveillance or autonomous weapons.

The Pentagon had argued that private companies should not be able to constrain military action, but Judge Lin disagreed, stating that ‘the empty invocation of national security is not a blank check to punish and retaliate against government critics’.

Anthropic’s designation was seen as an unprecedented move by Defense Secretary Pete Hegseth, who blocked the company from certain military contracts. This could have cost Anthropic billions of dollars in lost business and reputational harm.

The Trump administration had also lashed out at Anthropic on social media, with President Donald Trump describing it as ‘a radical left, woke company’ and ‘out-of-control’. However, Judge Lin found that this was not a valid reason for the Pentagon’s actions.

Anthropic has alleged that the government violated its right to free speech under the First Amendment of the Constitution by retaliating against its views on AI safety. The company also claimed it was not given a chance to dispute the designation, in violation of its Fifth Amendment right to due process.

The justice department countered that Anthropic’s refusal to lift restrictions could cause uncertainty in the Pentagon over how it could use Claude and risk disabling military systems during operations. However, Judge Lin found this argument to be unsupported by facts and inconsistent with the military’s past praise of Claude.

Anthropic has a second lawsuit pending in Washington DC, over a separate Pentagon supply-chain risk designation that could lead to its exclusion from civilian government contracts. The company says it opposes domestic surveillance as a violation of rights and believes AI models are not reliable enough for use in autonomous weapons.

The ruling is seen as a victory for Anthropic, which has welcomed the court’s decision that the supply chain risk designation was unlawful. However, the government may still appeal the decision.