A US judge ruled on Thursday that the Trump administration broke the law when it designated Anthropic as a supply chain risk earlier this year, finding that the government had unlawfully targeted the AI firm for refusing to comply with defense department demands.
“The empty invocation of national security is not a blank check to punish and retaliate against government critics,” Judge Rita Lin said in a 59-page decision.
Lin’s ruling barred the federal agencies named in the lawsuit from enforcing Donald Trump’s order to stop using Anthropic’s tools and overturned the designation of the company as a “supply chain risk” by the defense secretary, Pete Hegseth. The status, usually reserved for foreign firms, would have blocked government agencies from doing business with Anthropic.
The case emerged out of a months-long feud between Anthropic and the Pentagon at the start of the year. Anthropic refused to allow the government to use its Claude AI model for fully autonomous lethal weapons or domestic mass surveillance, resulting in Hegseth accusing the company of “arrogance and betrayal”.
Lin put a temporary pause on the government’s punitive measures in March, stating that the government’s actions looked like an attempt to “cripple Anthropic” for exercising its first amendment rights. The ruling this week makes that temporary suspension permanent, although the government may appeal.
“We welcome the court’s ruling that this supply chain risk designation was unlawful,” an Anthropic spokesperson said.
Lin’s ruling is a victory for Anthropic, which had warned that the supply chain risk designation could cost the company billions of dollars and complicate its business model. Anthropic is also planning an IPO later this year that could value the firm at $2tn and raise $100bn, exceeding the record set by SpaceX in June.
Anthropic still faces legal hurdles related to the supply chain risk designation, however, as the outcome of a second lawsuit in Washington DC is still pending. That case will be heard by a three-judge panel, two of whom are Trump appointees who have expressed skepticism about Anthropic’s arguments.
Anthropic says that AI models are not reliable enough to be safely used in autonomous weapons and that it opposes domestic surveillance as a violation of rights, but the Pentagon says private companies should not be able to constrain military action.
In its 9 March lawsuit, Anthropic alleged 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 said it was not given a chance to dispute the designation, in violation of its fifth amendment right to due process.
“Though the Department of War is undisputedly free to select the AI vendor of its choice,” Lin said, “the evidence demonstrates that the broad measures imposed on Anthropic were illegal and baseless.”
Anthropic’s designation was the first time a US company had been publicly categorized as a supply-chain risk under an obscure government-procurement statute aimed at protecting military systems from foreign sabotage.
With Reuters and Agence France-Presse
