Judge Strikes Pentagon Risk Label Against Anthropic

A California federal judge said the Trump administration's designation of Anthropic was unlawful retaliation and violated constitutional protections.Thank you for reading this post, don't forget to subscribe!

A federal judge in California has thrown out the Trump administration's designation of Anthropic as a supply chain risk, handing the company its first court win in a fight that has put the Pentagon's AI procurement practices under a bright light.

U.S. District Judge Rita Lin ruled Thursday evening that Defense Secretary Pete Hegseth's move was "unlawful retaliation" and violated the First Amendment. She also said the action was "arbitrary and capricious" and denied Anthropic due process under the Fifth Amendment.

The label, the backlash, and the legal break

The dispute started after Anthropic drew hard lines around safety guardrails that would have allowed the Pentagon to use its models for fully autonomous weapons and mass surveillance of American citizens. The Pentagon said it would use Anthropic models only for lawful purposes and argued the company was trying to control how the military used technology it had already bought.

Hegseth and President Donald Trump later labeled Anthropic a supply-chain risk and ordered federal agencies, including those outside the Defense Department, to stop working with the Claude maker.

Lin said the government's "words and deeds" showed the action was driven by a desire to make Anthropic "a public example" for its criticism of the administration. She also pointed to the disconnect between the risk label and other government actions, including Hegseth's proposal to apply the Defense Production Act to Anthropic, which would have treated the company as essential to national security rather than a threat to it.

Why the court said the designation did not hold up

The judge also cited the Defense Department's continued pursuit of a contract with Anthropic and the government's collaboration with the company's new model, Mythos, for cybersecurity. In Lin's view, those facts cut against the idea that Anthropic posed a supply-chain threat.

She wrote that Anthropic "undisputedly lacks" any backdoor access to its technology once it is handed over to the Defense Department. That mattered. The ruling said the broad restrictions imposed on the company were not supported by the record.

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

What Anthropic gets from the ruling

Anthropic welcomed the decision. "We welcome the court's ruling that this supply chain risk designation was unlawful," a spokesperson said in a statement shared with TechCrunch. "We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology."

The company filed two complaints against the Defense Department in March, one in California and one in Washington, D.C. The D.C. case is still .

The ruling does not end the broader fight over how federal agencies buy and use frontier AI systems. It does, however, strip away one of the government's most aggressive moves against a major model provider and puts the administration on the defensive over how far national security can be stretched when a vendor pushes back on military use cases.