Court rules Pentagon's blacklisting of Anthropic was unconstitutional
A US district judge ruled that the Trump administration's designation of AI company Anthropic as a 'supply chain risk' earlier this year violated the First Amendment. The decision caps months of conflict between Anthropic and the Pentagon over military AI restrictions.
A federal judge in California ruled on Thursday that the Pentagon's decision to blacklist AI company Anthropic earlier this year was unlawful, marking a significant win for the company after months of dispute with the Trump administration.
Judge Rita F. Lin found that Defense Secretary Pete Hegseth's move to label Anthropic a "supply chain risk" amounted to unlawful retaliation against the company for exercising its free speech rights, calling the decision arbitrary and without legitimate justification. She wrote that invoking national security does not give the government free rein to punish its critics.
How the dispute began
The conflict traces back to this past winter, when Hegseth sought to renegotiate contracts with all AI vendors working with the military, aiming to expand the Pentagon's authority to use AI for any lawful purpose. While most AI companies agreed to the new terms, Anthropic refused to drop two specific restrictions: barring its technology from being used for mass surveillance of Americans or for autonomous weapons capable of killing without human oversight.
Anthropic's refusal triggered weeks of escalating tension, criticism from Defense Department officials, and eventually an ultimatum from the administration. Shortly before that deadline, Anthropic CEO Dario Amodei publicly reaffirmed the company's position, stating that in certain narrow cases AI could undermine rather than protect democratic values. The Pentagon then designated Anthropic a supply chain risk — a label typically reserved for national security threats — and signed new AI contracts with seven other companies, including Google, Microsoft, OpenAI, and SpaceX.
Anthropic responded with a lawsuit in March, and Judge Lin issued a temporary block on the blacklist that same month, writing that punishing the company for publicly criticizing the government's contracting stance amounted to First Amendment retaliation. Thursday's ruling makes that finding final.
Anthropic spokesperson Danielle Ghiglieri said the company welcomed the ruling and remains focused on working with the government on national security applications of its technology.
