B1 Intermediate · 299 words · 2 min read

US Judge Overturns Pentagon's Supply Chain Risk Label For Anthropic

Judge Rita Lin said the measures against the AI company were illegal and baseless after it refused defence department demands.

A US judge ruled on Thursday that the Trump administration broke the law when it designated the AI company Anthropic as a supply chain risk earlier this year. Judge Rita Lin found that the government had unlawfully targeted the firm for refusing to comply with defence department demands.

"The empty invocation of national security is not a blank check to punish and retaliate against government critics," Lin said in a 59-page decision. She added: "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."

The ruling barred the federal agencies named in the lawsuit from enforcing Donald Trump's order to stop using Anthropic's tools, and it overturned the designation made by the defence secretary, Pete Hegseth. The status, usually reserved for foreign firms, would have blocked government agencies from doing business with the company. It was the first time a US company had been publicly placed in that category.

The case grew out of a months-long dispute at the start of the year. Anthropic refused to allow the government to use its Claude AI model for fully autonomous lethal weapons or domestic mass surveillance, and Hegseth accused the company of "arrogance and betrayal". In its lawsuit of 9 March, Anthropic said the government had violated its right to free speech and had not given it a chance to dispute the designation.

"We welcome the court's ruling that this supply chain risk designation was unlawful," an Anthropic spokesperson said. The government may appeal, and a second lawsuit in Washington DC is still pending. Anthropic had warned that the designation could cost it billions of dollars. The company is planning an IPO later this year that could value it at $2tn.

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