Judge Orders Pentagon to Reverse Anthropic Blacklisting

Artificial Intelligence & Machine Learning , Litigation , Next-Generation Technologies & Secure Development

The U.S. federal judge told the Department of Defense to cancel the supply chain designation it levied against Anthropic in a decision giving the artificial intelligence giant almost everything it asked for in a lawsuit against the Pentagon.

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Judge Rita F. Lin of the District Court for the Northern District of California said Defense Secretary Pete Hegseth's declaration of Anthropic as a supply chain risk in late February is unlawful. "The challenged actions constituted unlawful retaliation in violation of the First Amendment," she wrote (see: Pentagon Moves to Cut Anthropic From Defense AI Work).

Government agencies are free to choose AI vendors for their needs, she said. But evidence presented at trial "demonstrates that the broad measures imposed on Anthropic were illegal and baseless."

"The empty invocation of national security is not a blank check to punish and retaliate against government critics," Lin said.

The court found that, in declaring Anthropic to be a risk to national security, the government skipped procedural steps. The Defense Department did not provide written records showing that less intrusive measures were not available or taken, and the decision was not presented to Congress. Lin also ruled that the risk assessment against the AI company came from the wrong official.

During a July 30 hearing, Lin was skeptical of the government's arguments that it was not retaliating against a company critical of its actions, but rather protecting its right to enforce a contract.

Anthropic filed a lawsuit against the Defense department on Mar. 9 after Hegseth took to social media to declare the company a supply chain risk.

The designation came after Anthropic asked the government to limit some use of its Claude models on the GenAI.mil platform. Anthropic already signed a contract with the government worth up to $200 million over two years, but feared it would be used for mass surveillance and lethal autonomous warfare.

Lin only deviated from granting Anthropic's motions where the company requested the judge to permanently block the blacklisting at other federal agencies that "undisputedly did not take any relevant action or who took only interim measures" to implement the designation. Anthropic asked for a broad permanent injunction after President Donald Trump on social media asserted that "EVERY Federal Agency in the United States Government to IMMEDIATELY CEASE all use of Anthropic's technology."

Anthropic did not show that Trump, in his post, actually violated a specific procurement statute, Liun wrote.

The Defense department can still appeal Lin's decision. Anthropic also sued the government in the U.S. Court of Appeals for the District of Columbia over a separate supply-chain risk designation that invoked the Federal Acquisition Supply Chain Security Act as a governing authority. A three judge panel there earlier this year did not follow Anthropic's motion for a temporary injunction against that supply chain designation.