Federal judge rules Pentagon acted illegally in punishing Anthropic
A federal judge ruled that the Pentagon's supply chain risk designation against AI company Anthropic was illegal and based on retaliation for the company's criticism of government AI policy.
A federal judge has ruled in favor of artificial intelligence company Anthropic in its legal battle against the Pentagon, finding that the government acted illegally when it punished the company for criticizing the Department of Defense's approach to AI use. U.S. District Judge Rita Lin issued the written order Thursday night, concluding that the government's actions were not grounded in legitimate national security concerns but in a desire to retaliate against the company's public stance.
The dispute began in February when President Donald Trump and Defense Secretary Pete Hegseth accused Anthropic of endangering national security and designated the company a supply chain risk. The designation followed Anthropic CEO Dario Amodei's refusal to back down over concerns that the company's products could be used for mass surveillance or autonomous armed drones. Anthropic sued the Pentagon in March, calling the action an "unlawful campaign of retaliation" over its refusal to allow unrestricted military use of its technology.
In her 59-page ruling, Lin wrote that the government's actions "were based on a desire to make a public example out of Anthropic for its 'arrogance' in criticizing the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model." She added that neither the Constitution nor the federal statute the government invoked allows them to "impose sweeping penalties based principally on Anthropic's critique of the Administration's views." Lin, an appointee of former President Joe Biden, had previously blocked the Pentagon from labeling the company as a supply chain risk and blocked enforcement of a social media directive ordering federal agencies to stop using Anthropic and its chatbot Claude.
During a hearing in July, Lin described the government's position as "really troubling" and "at odds to me with the First Amendment," noting that the record had "gotten worse for the government" over time. Department of Justice lawyers had argued that AI models are "so staggeringly enormous and opaque" that the Defense Department cannot evaluate them the same way it would physical hardware. Anthropic lawyer Michael Mongan countered that the government's actions "profoundly harm Anthropic" and "threaten more broadly to chill speech and debate on a very important issue."
Anthropic welcomed the ruling. A company spokesperson said in a statement: "We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology." The White House did not immediately respond to a request for comment, and the government is expected to appeal the decision.
The legal fight has intensified an unusually public dispute over how AI can be used in warfare and mass surveillance. Notably, OpenAI, Anthropic's primary rival and the maker of ChatGPT, reached its own deal to work with the Pentagon just hours after the government punished Anthropic for its stance. Both companies are preparing for initial public offerings. Anthropic has also filed a separate, narrower case still pending in the federal appeals court in Washington, D.C., involving a different rule the Pentagon is using to declare the company a supply chain risk.
