A United States federal judge has ruled in favor of the artificial intelligence (AI) company Anthropic in its dispute with the Pentagon over its labeling as a "supply chain risk."
California district judge Rita Lin concluded that the label constituted an attempt by the government to make an example of Anthropic after the company refused to allow unrestricted military use of its technology and criticized the Department of Defense's use of AI.
Lin wrote in a 59-page ruling that "the empty invocation of national security is not a blank check to punish and retaliate against government critics."
She said 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."
An Anthropic spokesperson said they welcomed the judge's ruling, saying 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 dispute between the San Francisco-based firm and the government broke out in February when President Donald Trump and Defense Secretary Pete Hegseth accused Anthropic of endangering national security after the company declined to allow unrestricted military use of its technology.
"We will not knowingly provide a product that puts America's warfighters and civilians at risk," wrote CEO Dario Amodei in a blog post back in February, adding that AI wasn't reliable enough to be used in fully autonomous weapons systems and expressing concerns over mass surveillance.
In March, the Pentagon designated Anthropic a "supply chain risk" – a highly unusual label to apply to a US firm. The company complained of an "unlawful campaign of retaliation," pointing out that the designation would have negative consequences for its business beyond defense deals.
Indeed, President Trump ordered all US government agencies to stop using Anthropic technology, calling it "a radical left, woke company" and "out-of-control" in a social media rant.
Defense Secretary Hegseth said companies would be expected to cut business links to Anthropic if they wanted to be considered for defense sector deals.
Shortly afterwards, OpenAI, Anthropic's primary tech industry rival and operator of ChatGPT, made its own deal to work with the Pentagon.
In her ruling, Judge Lin, an appointee of former President Joe Biden, wrote that neither the US 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."
Earlier in the legal proceedings, Lin had temporarily blocked the Pentagon from labeling the company as a supply chain risk and blocked enforcement of Trump's social media directive ordering all federal agencies to stop using Anthropic and its chatbot Claude.
In a preliminary hearing on July 30, Lin had said that the government's position was "really troubling" and seemed "at odds to me with the First Amendment."
The White House is yet to comment on the decision.
In the coming weeks, Anthropic is expected to launch on the US stock market with an initial public offering (IPO) that could potentially eclipse SpaceX's record Wall Street debut in June, which raised $86 billion (€74 billion).
