A federal judge in California ruled on Thursday evening that the Trump administration’s designation of Anthropic as a supply chain risk was illegal.
U.S. District Judge Rita Lin ruled that Defense Secretary Pete Hegseth’s labeling of Anthropic as a national security risk constituted “unlawful retaliation” in violation of the First Amendment. She described the decision as “arbitrary and capricious” and noted that the company was denied the due process required under the Fifth Amendment.
Earlier this year, Hegseth and President Donald Trump labeled Anthropic a supply chain risk and ordered all federal agencies, including those outside the defense department, to cease working with the Claude maker.
The conflict arose when Anthropic established strict safety guardrails preventing the Pentagon from using its models for fully autonomous weapons or mass surveillance of U.S. citizens. The Pentagon denied these intentions and accused Anthropic of attempting to control the military's use of its purchased models.
The judge observed that the government’s actions confirmed a desire to make an example of Anthropic for its “arrogance” in criticizing the government.
Lin highlighted a disconnect between the supply chain label and other actions, such as Hegseth’s proposal to apply the Defense Production Act to Anthropic, which would imply the company was essential to national security rather than a threat. Additionally, she noted the Department of Defense continued to pursue a contract with the company and collaborated with its new Mythos model for cybersecurity.
Lin further stated that it is clear Anthropic “undisputedly lacks” any backdoor access to its technology once it is handed over to the Department of Defense.
“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.
“We welcome the court’s ruling that this supply chain risk designation was unlawful,” an Anthropic spokesperson stated. The spokesperson added that the company remains focused on working productively with the government to harness AI for national security benefits.
Anthropic filed two complaints against the DOD in March in California and Washington, D.C., though the lawsuit in D.C. remains ongoing.
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