In a legal victory for artificial intelligence firm Anthropic, a federal judge has ruled against the Pentagon over its decision earlier this year to designate the company a supply chain risk.
In a written order issued Thursday night, U.S. District Judge Rita Lin determined that the Department of Defense acted unlawfully by penalizing the tech firm for voicing criticism of defense policy on AI integration. The government is expected to challenge the decision.
The conflict escalated in February after President Donald Trump and Defense Secretary Pete Hegseth cited national security concerns to brand Anthropic a supply chain risk. Anthropic CEO Dario Amodei refused to acquiesce amid concerns the company's technology could be applied to mass surveillance or autonomous military drones.
In her ruling, Lin stated that federal 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."
An Anthropic spokesperson welcomed the outcome 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 issue a response to requests for comment.
Writing in the 59-page decision, Lin, an appointee of former President Joe Biden, asserted that constitutional provisions and federal statutes do not allow authorities to "impose sweeping penalties based principally on Anthropic’s critique of the Administration’s views."
Anthropic launched its lawsuit against the Pentagon in March in response to the supply chain classification, challenging what it described as an "unlawful campaign of retaliation" caused by its refusal to grant unrestricted military access to its tools.
The court fight highlighted a rare public dispute regarding the role of AI in defense and surveillance operations. Notably, primary industry competitor OpenAI, creator of ChatGPT, reached its own agreement to collaborate with defense officials hours after the government penalized Anthropic.
Both Anthropic and OpenAI are currently preparing for anticipated initial public offerings.
Anthropic is also pursuing a secondary, narrower lawsuit currently pending in the federal appeals court in Washington, D.C., targeting a separate regulatory mechanism invoked by the Pentagon to designate the firm a risk.
Earlier in the case, Lin granted a preliminary injunction prohibiting the Pentagon from applying the supply chain designation and halting the enforcement of a social media directive from Trump instructing federal agencies to cease using Anthropic products and its Claude chatbot.
During a hearing on July 30, Lin described the government's stance as "really troubling" and remarked that it appeared "at odds to me with the First Amendment." She added that the legal standing had "gotten worse for the government" over time.
Department of Justice attorneys argued at that hearing that the complex architecture of AI models is "so staggeringly enormous and opaque" that defense officials cannot evaluate it through standard methods used for physical hardware.
Anthropic attorney Michael Mongan asserted during the proceeding that official actions "profoundly harm Anthropic" and "threaten more broadly to chill speech and debate on a very important issue."
