U.S. District Judge Rita Lin ruled Thursday that the Trump administration illegally blacklisted AI company Anthropic, finding the government’s actions unconstitutional and without legal basis.
The ruling, spanning 59 pages, determined the Pentagon’s decision to designate Anthropic as a supply chain risk was both unlawful and retaliatory in nature.
“Though the Department of War is undisputedly free to select the AI vendor of its choice, the evidence demonstrates that the broad measures imposed on Anthropic were illegal and baseless,” Judge Lin wrote in the ruling.
The supply chain risk designation is a label the government typically reserves for foreign intelligence entities or groups linked to sabotage, not American technology firms.
Judge Lin found the administration violated both the First Amendment and the Due Process clause of the Fifth Amendment, concluding the actions amounted to unlawful retaliation.
“The empty invocation of national security is not a blank check to punish and retaliate against government critics,” Judge Rita F. Lin wrote pointedly in the ruling.
Lin further concluded that Defense Secretary Pete Hegseth’s decision to designate Anthropic a supply chain risk “was arbitrary and capricious” under federal administrative law.
The dispute originated when negotiations between Anthropic and the Pentagon broke down over safety guardrails, with Anthropic demanding its technology not be used in fully autonomous lethal weapons or for mass surveillance of Americans.
The Pentagon insisted it be allowed to use Anthropic’s Claude AI without those restrictions, prompting Anthropic to file suit against the Trump administration last March.
“The Department of War’s records show that it designated Anthropic as a supply chain risk because of its ‘hostile manner through the press,'” Lin wrote when she temporarily blocked the blacklist earlier this year.
The ruling directs the government to rescind all directives and communications that blacklisted Anthropic as a supply chain risk under this particular designation.
The court stayed the injunction for seven days, giving the Department of Justice time to file an appeal before enforcement restrictions fully take effect.
The Pentagon relied on two separate designations to justify its supply chain risk action, meaning litigation is proceeding across two different courts simultaneously.
Anthropic still faces a separate lawsuit in Washington, D.C., challenging a different Pentagon supply chain risk designation that threatens its ability to work with civilian government agencies.
Anthropic spokesperson Danielle Ghiglieri said, “We welcome the court’s ruling that this supply chain risk designation was unlawful,” adding, “We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology.”
The DOJ and Department of Defense did not immediately respond to requests for comment on the ruling or potential next steps.
