The Trump administration’s blacklisting of Anthropic was illegal, a federal judge ruled in an order vacating government directives against the use of the firm’s AI technology.
The government illegally retaliated against Anthropic by designating it a supply-chain risk to national security, said yesterday’s ruling by Judge Rita Lin in the US District Court for the Northern District of California. The maker of Claude AI technology was barred by the US after it refused to drop restrictions on the use of its products for lethal autonomous warfare and mass surveillance of Americans, the ruling said.
“The undisputed record shows that the challenged actions constituted unlawful retaliation in violation of the First Amendment,” Lin wrote in an order that granted key portions of Anthropic’s motion for summary judgment.
As Lin noted, Trump and Defense Secretary Pete Hegseth “ordered all federal agencies to permanently stop using Anthropic’s products, and banned all defense contractors from doing any business with Anthropic, even if unrelated to the military.” Lin vacated those government actions and ordered the Trump administration to rescind the directives that she deemed illegal.
National security is not blank check to retaliate
“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,” Lin wrote, referring to the Trump administration’s preferred name for the Department of Defense. “The empty invocation of national security is not a blank check to punish and retaliate against government critics,” she added.
The Trump administration provided only a “slim” justification to the court, Lin wrote, stating that the federal defendants “have now backed away from the thrust of their risk assessment, which relied on Anthropic having backdoor access to its technology once deployed in a national security system. It is now clear that Anthropic undisputedly lacks any such access and that, as Defendants concede, Anthropic’s technology is itself no riskier to the national security than any other ‘black box’ artificial intelligence model.”
Anthropic sued the Trump administration in March, saying the government blacklisted it in retaliation after Anthropic refused to let its Claude AI models be used for autonomous warfare and mass surveillance of Americans. Anthropic said the First Amendment gives it “the right to express its views—both publicly and to the government—about the limitations of its own AI services and important issues of AI safety,” and that the government process for designating it a supply-chain risk did not comply with procedures mandated by Congress.
The White House responded to Anthropic’s lawsuit by saying that “President Trump will never allow a radical left, woke company to jeopardize our national security by dictating how the greatest and most powerful military in the world operates.”
Two courts probe blacklist
The Trump administration won an early ruling from Trump-appointed judges in the US Court of Appeals for the District of Columbia Circuit, which denied Anthropic’s emergency motion for a stay. But the DC Circuit appeals court went on to hold oral arguments and is still reviewing the case while the sides continue to submit briefs.
Anthropic had meanwhile also sued in the Northern District of California and won multiple rulings from Lin, a Biden appointee. Lin issued a preliminary injunction on March 26, prohibiting the government from implementing the Trump and Hegseth orders.
The preliminary-injunction ruling said that nothing in the relevant US law “supports the Orwellian notion that an American company may be branded a potential adversary and saboteur of the US for expressing disagreement with the government.” The March injunction did not require the Trump administration to use Anthropic products as long as its “actions are consistent with applicable regulations, statutes, and constitutional provisions.”
Lin yesterday ruled that the Trump administration actions were arbitrary and capricious, violating Administrative Procedure Act requirements that govern how federal agencies may impose regulations. She found that Anthropic does not meet the legal definition of a supply-chain risk, which is limited to “the risk that an adversary may sabotage, maliciously introduce unwanted function, or otherwise subvert… a covered system.”
“The plain text of the statute is directed at covert acts or hacks, not overt, public positions regarding contract terms,” Lin wrote.
Tech industry welcomes ruling
The Trump administration could appeal the ruling and is continuing to make its case in the DC Circuit Court of Appeals. We contacted the White House and will update this article if it provides a comment.
The Computer & Communications Industry Association, a lobby group for tech firms, said it is “encouraged by this outcome, as this case matters to anyone doing business with the US government. By bypassing standard procurement to target Anthropic in this fashion, the Pentagon’s action deeply concerned any company that has contracts with the government.”
Government use of Anthropic hasn’t completely stopped. “Despite the ban, government agencies continued using Anthropic’s tools as the White House and the company gradually mended ties ahead of Anthropic’s planned IPO,” Reuters wrote.
Anthropic said in a statement provided to Ars that “we welcome the court’s ruling that this supply chain risk designation was unlawful. We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology.”
